What is excursion insurance?
As a tour or excursion operator you will need excursion insurance in order to be recommended and listed as an excursion option for cruise line passengers. No matter what your core activities and unique tour experiences are, excursion insurance is required to protect you and the cruise passengers from the risks associated with the tour activities.
What is Excursion Insurance and Who Needs it?
Cruise lines will require following excursion insurance requirements when determining which operators that they will vet, endorse and recommend to the cruise passengers:
- CONTINGENT GENERAL LIABILITY Also referred to as Third Party or Public Liability, covers bodily injury and property damage to tourists in your care, custody and control while participating in an excursion tour. This coverage excludes auto, aircraft and motorboats. Non-motorized watercraft such as kayaks, canoes, sunfish, etc. are included. This does not replace any business property or liability coverage placed locally.
- CONTINGENT AUTO LIABILITY
This coverage is excess auto liability over and above your local compulsory automobile insurance and includes coverage for owned, hired and non owned vehicles.
- CONTINGENT WATERCRAFT LIABILITY (MOTORIZED)
Similar to the Contingent Auto Liability, this covers owned, hired and non-owed watercraft having a motor that carries passengers for hire.
For more information on excursion insurance requirements, or to learn more about specific policy coverage, contact us at Excursion Operators Insurance Group today. We have been proudly serving the needs of tour and excursion operators worldwide for over 13 years.
Excursion Operators Insurance Group has been serving the insurance needs of Excursion and Tour Operators worldwide for over 13 years. Our Excursion Operator’s Liability Program is underwritten by Lloyd’s of London, the world’s leading insurance market providing specialty insurance services to businesses in over 200 countries and territories, rated “A” XV (Excellent) by AM Best. Our Excursion and Tour Operators’ division offers expertise, dependability, fast response and friendly service that you have come to expect. We treasure the relationships we have developed over the years and are delighted to be able to serve you once more. As an Excursion or Tour Operator, you now have access to an insurance program designed and developed to provide the coverage necessary to meet the requirements of all Cruise Lines globally.
Why do I need excursion insurance?
If you’re a tour operator near a port of call, excursion insurance is a must to work with cruise lines. Failing to have the right coverage will result in fewer people participating, not to mention the fact that it could leave you liable for damages in the event a cruise line passenger is injured.
Why Do I Need Excursion Insurance?
Cruise lines recommend offshore excursions to their guests as a part of their services. When recommending these excursions, operators look at a number of things, including whether or not a tour company has the right insurance coverage in place. Those who do not have the proper coverage and limits will likely be excluded from the program by the cruise lines, since this deficiency will leave them liable for damages should one of their passengers become injured.
Getting mentioned by cruise lines can go a long way toward increasing traffic to tour and excursion operators. Many passengers rely solely on advice from the cruise ship personnel when planning activities because they view them as a valuable source of information. Since guests are often unfamiliar with a given area, they may feel uncomfortable trying to explore on their own and will depend on the cruise directors to advise them of the best offshore tours to enjoy. If your business is not listed, passengers will likely visit your competition instead.
Some passengers may choose to find their own activities in which to participate; however, savvy travelers will also want to make sure a tour operator in insured before they visit. As such, you want to answer fully any questions from the individual consumers. If you are unable to provide proof of coverage, you could lose a great deal of business.
Just because you don’t have any insurance doesn’t mean you are not liable for injuries that happen. Should one of your guests become injured, you could have to pay for damages out of pocket, which in many cases could be devastating to your business. In addition, injured patrons could easily write reviews on different travel web sites letting others know you are uninsured, and this could cause them to avoid visiting your establishment whenever they embark.
When it gets down to it, a great way to enhance your presence in the offshore excursion business is to ensure that you have the proper excursion insurance in place. Doing so will go a long way toward getting recognized by the Cruise Lines, not to mention the fact that it will also help you establish yourself as reputable among those who visit.
What does excursion insurance cover?
There are several excursion insurance requirements for tour operators who contract with cruise lines and resort hotels, or sub-contract to other major tour companies. These requirements are a necessity for any tour or excursion operator to compete in a business that places heavy emphasis on the quality and amount of the liability insurance policy of a service provider that they refer their guest to.
Without the proper liability protection, tour and excursion operators will inevitably miss opportunities to provide services to these customers, and will miss out on profit opportunities for their company.
Excursion Insurance Basics
Contingent General Liability
Also referred to as Third Party or Public Liability, covers bodily injury and property damage to tourists in your care, custody and control while participating in an excursion tour. This coverage excludes auto, aircraft and motorboats. Non-motorized watercraft such as kayaks; canoes; sunfish; etc. are included. This does not replace any business property or liability coverage placed locally. This insurance is mandatory for mitigating exposure for any tour operator dealing directly with the public. This includes every service from ziplines or river rafting tours, cultural walking tours or museum tours to vehicle and watercraft rentals.
The liability insurance coverage should include third party claims for personal injury, property damage or loss and the legal cost in settling the claims. The claims against tour operators can be settled out of court in some cases, but there is usually a monetary settlement involved that could potentially bankrupt a tour operator without adequate insurance coverage.
Contingent Auto Liability
This coverage is excess auto liability coverage over and above your local compulsory automobile insurance and includes coverage for owned, hired and non owned vehicles.
Contingent Watercraft Liability
Similar to the Contingent Auto Liability, this covers owned, hired and non-owed watercraft having a motor that carries passengers for hire.
These programs may include the following protection; refer to your policy for specific coverage:
- Damage to the vehicle or watercraft from the person using it,
- Injury and property damage or loss to participants on the tour if an accident occurs,
- Medical expenses for injuries.
Insurance policies are usually customized to cover potential accidents based on the types of vehicles and watercraft as well as their function. While some tour companies may own their buses, many contract with bus companies to transport guests on their tours at various locations. They may also hire local tour guides.
The local bus company should have coverage for their fleet, their employees and third party coverage in the event of an accident while tour guests are aboard. The tour operator generally holds the sub-contractor, the bus company, responsible for personal injury and property damage and loss. If a bus or van breaks down, the transportation contractor must provide another vehicle to bring passengers to the cruise ship or airport on time.
Vehicle and equipment operators must advise their guests on all safety requirements and procedures related to the particular tour or excursion when required. It is the tour operator’s responsibility to prepare the guest with the emergency procedures in advance of any event for the safety and protection of all guests.
What are A.M. Best ratings and why it matters to excursion operators?
All ground excursion operators working with cruise lines must carry liability insurance from a reliable carrier with at least an A- rating from A.M. Best’s Consumer Insurance Center. The rating guarantees that your insurance company will be able to meet its financial obligations if necessary. An insurance company with a lower rating is not acceptable.
A.M. Best analyzes the credit rating and standards of each insurance company. The annual balance sheet and business profile are reviewed along with the businesses that are covered.
A.M. Best Ratings and Why It Matters to Excursion Operators
All cruise lines want to know the name of the insurance carrier that covers your ground tour and transportation services before they contract with your company. This is one of the excursion insurance requirements. If a mishaps occurs to a cruise ship passenger on a land tour, the cruise line does not want to be responsible for any medical costs. The cruise line may have to refund part or all of the passenger’s payment and that of the traveling companion if the injured party’s cruise is interrupted.
Cruise ship passengers are encouraged to buy travel insurance offered by the cruise line or another insurance company but it is not mandatory. The trip insurance will cover lost luggage, medical emergencies and cruise interruption but the issue of responsibility may arise before any reimbursement is made. The cruise line’s excursion insurance requirements expect all tour and transportation companies to be responsible for their participants.
Excursion Insurance, member of the NSI Insurance Group, meets these excursion insurance requirements with their customized policies. The A.M. Best Company, founded in 1899, gives Excursion Insurance an A- rating. This third-party evaluation means the insurance company is financially solvent and able to cover any incurred expenses.
The Excursion Insurance Operator’s Liability Insurance Program is underwritten by Lloyds of London. This covers personal injury and property damage to tourists in the care of a tour operator or ground transportation service.
Different countries, different laws and insurance regulations
Cruise ships travel to foreign countries and most ships are registered under foreign flags. Passengers come from all countries including the United States where liability insurance is very important. Each cruise line carries its own liability insurance to cover passengers while they are aboard the ship. This coverage does not extend to land tours.
Many cruise passengers are not aware of this. It is likely to be the passenger who declines trip insurance who has an accident on a land tour or who loses a wallet and passport while on a shore excursion. This passenger may hold the tour operator responsible for the injury or loss. The passenger does not care if liability laws are different in Mexico, Italy or Australia.
Cruise line excursion insurance requirements include tour operators dealing with unhappy passengers. This involves the passengers who were disappointed in the shore excursion and want a refund. If they signed up and paid with the cruise line, they will probably be reimbursed by the cruise ship purser’s office. The cruise line will expect the tour operator to cover the reimbursement.
Luggage can be lost, stolen or damaged while in transit between the cruise ship and a hotel or airport. The transportation company is held responsible by the cruise line. This can be an expensive problem for the transporter.
Cruise lines have learned to prepare for the unexpected. Tour operators must also be prepared for the unexpected with insurance for any mishap.
Why does worldwide jurisdiction matter to tour operators?
The cruise industry by its very nature is a worldwide industry with cruise ships covering the world putting into ports in countries with different liability laws. Passengers come from everywhere as well making it difficult to determine a jurisdiction for any insurance claims that arise from a cruise passenger’s injuries suffered while on an off shore excursion.
This world wide nature of the cruise industry and its passengers make it mandatory for excursion operators to have personal injury and property loss or damage coverage with worldwide jurisdiction regardless of more relaxed liability laws of the country where they are located. Without excursion insurance tour operators are not able to have their tours listed as approved tours by the cruise lines which can significantly decrease the number of guests on a tour operator’s excursion.
“Jurisdiction means the legal environment which will apply to a contract of insurance.”
Tour operators contracting with cruise lines must have worldwide jurisdiction insurance from a company that works with tour services in many countries since world wide jurisdiction for liability is not limited to the country where the tour service is located. World wide jurisdiction can benefit cruise line passengers who are injured or suffer losses due to negligence since they can file claims or a suit against a tour operator from anywhere in the world.
Cruise Lines Don’t Want to Be Held Liable for the Actions of Tour Operators
Cruise lines do not expect to be held responsible for any injuries, property damage or loss experienced by passengers while they are on a tour or excursion in a port. The tour operator’s excursion insurance should exempt the cruise line from this responsibility. However, an injured passenger may not understand this since it’s the cruise line that brought him or her to the port even though the injury occurred during a land activity such as mountain biking.
What Excursion Insurance Covers
A person who is injured while on a shore excursion and is taken to a hospital will expect the tour operator to cover medical costs. The injured person probably has a spouse or travel companion who will stay with him or her if the injuries require that they miss the remainder of the cruise. This involves additional food and lodging for the concerned spouse.
The cruise line may offer the passengers a free cruise upon recovery but it’s not required.
If the injured passenger must be airlifted to another hospital, the cost will be enormous. Regular airfare back to the injured party’s home will also be expensive. Hopefully, the airline will work with the injured party and waive change fees in rerouting the passengers who may have flow to a departure port for the cruise ship. If the cruise line made the air reservations, its air department may take care of the rerouting.
The tour operator will be expected to cover the costs unless the injured passenger has trip cancelation and interruption insurance. Most trip insurance covers emergency airlift and has world-wide coverage. There may still be a question of responsibility with the trip insurance company and the tour operator’s insurance carrier.
If the injured passenger has to pay medical expenses, the tour operator can expect a claim from the injured party for reimbursement. The injured person may now be back home in the U.S. or U.K., but he or she can file that claim from anywhere. A dependable insurance company will try to settle that claim out of court to avoid legal fees.
I have local insurance, why do I need excursion insurance as well?
As a tour or excursion operator the first step in making sure that you have the minimum insurance for operating your business is complying with local insurance requirements. This local insurance coverage can indemnify you if your tour boat hits a dock or another boat or an employee crashes the company car.
If your business is only focused on local inhabitants for the participants of your tours you might be able to get away with a simple insurance policy from a local insurance provider. However, if you want to contract your business with cruise lines you will need to have excursion insurance with complete, comprehensive liability, vehicle and/or watercraft coverage from a known carrier with a high credit rating to be acceptable to a cruise line.
Vehicle Coverage for Ground Tours
For each type of excursion there are specific insurance requirements that are required. To operate as a ground tour for any cruise ship, your vehicles, drivers and passengers must be covered with reliable tour operator insurance customized for your service. The coverage amount depends on the tour company’s business but it’s likely to be far more than your local insurance requirement.
Personal liability insurance to cover passenger injuries and loss of property is mandatory. The cruise line is interested in the welfare of passengers in your vehicles but they are not responsible for any mishap caused by your drivers or another driver.
Ground transportation companies transporting people between cruise ships, hotels or airports must have extensive baggage coverage in the event that someone’s luggage is missing. This rarely happens if bags are tagged correctly but the transport company must have tour operator insurance for this mishap.
Coverage for Possibly Dangerous Activities
In some cases, passengers may want to try something fast pace and possible dangerous such as mountain biking or ziplining. Businesses that offer tours like this must also have liability insurance to cover any mishap. They must also provide safety equipment and instructions. Insurance companies covering these types of tours have very strict safety requirements.
Whether your tour company offers a smooth catamaran trip to snorkel with the stingrays on Grand Cayman or you offer harbor cruise or whale watching tours to ship passengers you must have extensive tour operator insurance covering personal injury and property loss, similar to land operators.
If you are operating in the U.S. or Canada, you must have Coast Guard approval and you must supply life jackets and other safety equipment. A kayak tour in the Juneau-Douglas Island area must provide safety equipment and instruction.
Non-motorized watercraft rental companies must also carry the comprehensive liability insurance. It is in the best interest of the company to make sure anyone renting equipment knows how to use it, is capable and uses provided safety equipment.
A tour operator or watercraft renter may refuse to rent a kayak or jet ski to someone who won’t wear a life jacket or appears intoxicated. The rental or tour agency is responsible for the renter using the equipment. The renter is not responsible for damage to equipment, however.
A reliable insurance company will specify various requirements for acceptable rental and operating conditions.
Keep Them Happy
Cruise lines like happy passengers and know that happy customers are more likely to return for a future cruise and will tell their friends about their wonderful experience, including shore excursions if everything is done right. The cruise lines must know that shore excursion operators share their enthusiasm for happy customers and it’s in everyone’s best interest to make sure tours go smoothly and all insurance requirements are met.
Excursion Insurance, a member of the NSI group, is a top-rated carrier that will provide customized insurance for your port of call tour operations.
How does travel insurance for cruise passengers differ from excursion insurance for tour operators?
If you do an internet search for “travel insurance” you will find that there are several types of coverage that exist. Trip cancellation; medical travel insurance; international travel insurance and excursion insurance just to name just a few. With differing types of travel insurance available it can create questions for travelers and tour operators alike as to what the specific insurance policies include and what is needed by the traveler versus what is needed by the tour operator.
All cruise lines carry their own complex insurance packages to protect the vessels, crew and passengers. Passengers can buy their own trip insurance; however, these insurance policies don’t extend to the tour excursion operators on shore. Tour operators hoping to work with cruise lines for shore excursions are required to carry very specific excursion operator insurance.
Travel Insurance – Trip Cancellation and Interruption Insurance
Passengers are strongly advised to purchase the cruise line’s trip cancellation and interruption insurance at the time of booking but it’s not mandatory. This insurance includes baggage protection, flight delays, and emergencies that might require a last minute cancellation.
Passenger trip insurance includes medical emergencies that might occur while on the cruise, emergency evacuation and even repatriation of remains, (not a pleasant subject but it does happen).
Regardless of whether the cruise line passenger has chosen to purchase Travel Insurance or not, the shore tour operator must be protected with excursion operator insurance to cover unexpected accidents and other emergencies while the cruise line passengers are on their tour or excursion. Cruise lines must be reassured that all of the shore excursion operators they use are the safest and most reliable in each port of call, and each tour operator and shore excursion operator must provide the cruise line with proof of insurance coverage that will protect the cruise line and their passengers in the event of an accident.
There are many shore excursion options for cruise ship passengers including:
- Diving, Scuba and snorkeling
- Sailing, fishing, boating
- Jet skiing and beach activities
- Bus tours
- Zipline Excursions
- Bicycle tours
- Hikes and treks
- Cultural tours
These are all popular activities enjoyed by cruise passengers. Most passengers want to see the local sights and spend time in port with fun, unique activities. Each of these activities also has the potential for accidental injury to a cruise passenger and all recommended tour operators must carry some or all of the following coverage.
Watercraft Liability Insurance
Water sports are very popular and very fun, but they can result in unexpected accidents once-in-awhile. Excursion or tour operators who provide sailboats, jet skis and powerboats must have Contingent Watercraft Liability insurance. This includes activities like party boats and the popular Banana Boat Rides in many ports.
Tour operators for diving and snorkeling trips must also have insurance that covers the boats, dive equipment and the people using it. A diving tour operator must verify that all divers are PADI certified before allowing them to use equipment.
Any tour recommended and endorsed by the cruise ship using a watercraft must be covered with excursion operators insurance. This includes river tours, river rafting, fishing expeditions, jet boat tours, whale watching and bay excursions.
Contingent Auto Liability
This coverage is excess auto liability over and above your local compulsory automobile insurance and includes coverage for owned, hired and non owned vehicles. Cruise lines contract with land tour bus companies to transport passengers to different locations in each port. The tour buses may be the open double decker vehicles or enclosed air conditioned buses. These tour operators must have Contingent Auto Liability insurance in addition to local primary commercial auto insurance.
Contingent General Liability
Also referred to as Third Party or Public Liability, covers bodily injury and property damage to tourists in your care, custody and control while participating in an excursion tour. This coverage excludes auto, aircraft and motorboats. Non-motorized watercraft such as kayaks, canoes, sunfish, etc. are included. This does not replace any business property or liability coverage placed locally. Zipline, bicycle, hiking and other land tour operators must have Contingent General Liability insurance to cover unexpected bodily injury or property damage.
Various countries have different liability laws. Cruise lines are responsible for their passengers and they will only contract with reliable tour operators who are covered by appropriate liability coverage.