Q:Could my agency be liable to a client who purchases trip cancellation insurance based on my travel agents mistaken assurance that the insurance would cover cancellation due to a particular medical condition? If so, how can we prevent such liability, given that our agents describe insurance coverage many times each day?

A: Trip cancellation insurance has become so complicated that there is no way that the average travel agent can memorize everything that is and isnt covered. Nor can the average agent really understand the insurance policy itself, which is written in legalese, even assuming that the agent has access to the policy.

For example, one policy that I recently read has 37 coverages, which are problems or occurrences before or during the trip, and 18 exclusions, which are similar-sounding problems or occurrences that arent covered. To top it off, the policy has 34 definitions, many of which are quite lengthy and not intuitive.

Just one of the 18 exclusions is for pre-existing medical conditions. That definition has well over 100 words, and the conditions for waiver thereof take up another 150 words.

Even if your travel agent has a genius-level IQ, there is just no way he or she could advise clients correctly day in and day out.

Your agency is liable for the consequences of your agents malpractice, which means negligence committed by a professional. However, not every mistake constitutes negligence, which occurs only when the conduct (such as the agents advice about insurance) is below the standard of practice in the community. To prove what that standard is, the plaintiff needs either a precedent or an expert witness.

There are no precedents in any state. So, could the plaintiff find an expert who would testify that the standard of practice in your community (or any community, for that matter) is to advise customers correctly all the time about trip cancellation insurance coverage? I doubt it.

Therefore, I do not believe that your agency would ever be held liable for such mistaken advice.

Even if the plaintiff could prove that your advice was negligent, you would still win unless the plaintiff also proved that he relied on your advice in deciding whether to pay for the trip. 

Even then, you might still be able to win if you could prove that the client was negligent in failing to read the policy after it arrived in the mail.

However, judges in small claims and similar courts do not always decide cases according to the law. Rather, they often dispense rough-and-ready justice based on which party can more easily suffer a loss. Therefore, you need to focus on how to stay out of court in the first place.

The best way is to require your agents to refrain from answering coverage questions. If they are asked a question, have them simply hand out the insurance brokers marketing materials. Then, in the leisure travel disclaimer that you ask clients to sign, add a sentence such as Client acknowledges that Agency has not made any representations about what conditions or occurrences trip cancellation insurance will cover.

If your agents cant refrain from providing insurance advice, then make sure that the client signs a disclaimer that has a sentence such as Client acknowledges that the terms of any trip cancellation policy supersede any advice given by Agency about what the policy may cover.

Mark Pestronk is a Fairfax, Va.-based attorney specializing in travel law. He answers your questions in the TravelWeekly.com Legal Ease forum. To contact Pestronk directly, e-mail him at[email protected].

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