Clarifying the costs of becoming a GISC member

Clarifying the costs of becoming a GISC member

ASTHERE has been a lot of discussion in the travel trade press regarding the General Insurance Standards Council. I would like to clarify the situation with regard to the cost of joining GISC.

Under the heading of fees in the second consultation document, dated October 1999, it clearly states there would be a minimum fee of £300 and a maximum of £100,000.

The actual fee payable would be calculated at 0.1% of the commission earned from the sale of insurance, and, as far as we are aware, this situation has not changed other than the minimum fee has been reduced to £200.

For any travel organisation to pay a fee in excess of £200 to GISC, its annual commission would have to exceed £20,000, not in insurance sales, merely the commission earned.

As a result, probably 90% of all travel agents will only pay £200, although the merits of payment of a fee is another issue.

Soon GISC will take over responsibility from the Association of British Insurers for the code of conduct which any insurance intermediary, including travel organisations, should already be strictly adhering to.

As far as professional indemnity insurance is concerned, I disagree with the limit of £1 million, particularly for the small independent travel agent, although to trade without any cover could be disastrous, especially where a sole trader or partnership is involved.

Apart from covering errors relating to the sale of insurance (in accordance with GISC regulations), professional indemnity insurance provides cover for the general activities of a travel organisation, such as holiday bookings, ticketing and visa information.

Should a client take legal action and win (with costs) for what they consider an error or omission in connection with travel arrangements or the issue of travel insurance, without professional indemnity cover this could result in the closure of the business, the liquidation of a limited company, or the bankruptcy of a sole trader/partners.

Derek Ketteridge

Derek Ketteridge and Associates

Brighton

East Sussex