Travel firms turning blind eye to the cost of crises

Travel firms are putting their futures at risk by failing to properly prepare for crises involving their clients while they are on holiday.

A panel of experts that took part in a Travel Weekly roundtable said too many firms believe a crisis won’t happen to them and only realise the ramifications when it is too late.

The situation was said to be increasingly critical for travel firms as consumers become more litigious, news spreads more quickly and extensively via modern technology and more agents accept liability by creating their own bespoke trips.

Vince Wilkins, underwriter at Vantage Underwriting, which provides crisis management insurance policies to travel companies to enable to them to pay for their response, said the travel firm the consumer dealt with is the one that will be expected to react. 

“It’s your company’s reputation on the line; if you want to be trading next month you need a crisis response. Every company has to have a continuity plan that enables you to keep your business running.”

Aito chairman Derek Moore said the need to insure yourself as a company against the cost of dealing with a crisis was not limited to the more apparently risky adventure travel sector.

“There is a lot of talk in the adventure community about risk assessment, but mainstream companies do not take as much interest in this as they should. Your customer could be on a villa holiday – the risks are the same,” he said.

Vantage has been selling Crisis Management Insurance for 10 years, its policy stemming from a hostage-taking in Yemen 13 years ago that led to the deaths of four Explore holidaymakers.

Moore, who worked at the operator at the time, said the company was keen to do everything it could to help the victims and their families but that it found it was “writing cheque after cheque”.

The incident cost it £100,000, Moore saying it was fortuitous that Explore had the funds to meet all the costs.

Wilkins said the insurance (which is available for an annual premium of just £500) covers the cost of providing a wide range of responses to a crisis.

These can include, public relations expertise, transportation for friends and family, crisis counsellors, the use of expert investigators and engineers and other associated costs.

He said because Vantage coordinates its response with all the UK providers of consumer travel insurance policies it can plug the gaps in, or augment, their cover.

For instance, some policies limit the number of family members they will pay for to fly out to the scene of an incident to just one.

Liaising with other insurance brokers also means it can help find available seats on aircraft being sent to coordinate the response for representatives from the operator or travel firm, Wilkins said.

He added it has helped one firm to handle a crisis that involved it calling all of its staff from over the UK to the head office to handle it which meant it incurred staff accommodation and subsistence costs.

For more tips read the full report from the . To find out more about the cover Vantage offers visit the insurer’s website.

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