What

EVERY TOUR OPERATOR NEEDS to know...

Table of Contents

• What is Excursion Insurance?

• Who Needs Excursion Insurance?

• What Excursion Insurance Covers

• Why Worldwide Jurisdiction Matters to Tour Operators? • A.M. Best Ratings

Page 2

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 lines. No matter your core operations and unique tour opportunities, excursion insurance is required to protect you from the risks associated with both the tour activities themselves and your day-to-day business interactions and functions. Cruise lines look for the following excursion insurance requirements when determining which operators they are willing to work with: 1. Commercial General Liability Insurance. This is generally a mandatory policy for tour and excursion operators that protects your company against property damage and bodily injury claims by third parties that may arise through your company’s business operations and activities. This includes both your paying clients and the general public. 2. Contingent General Liability Insurance. This is mandatory for mitigating exposure for any tour operator dealing directly with cruise passengers. This includes every service from parasailing and ziplines to river rafting tours, vehicle and watercraft rentals. 3. Contingent Auto. This liability insurance is an excursion insurance requirement for tour operators with any type of motorized vehicles that provide transportation to cruise passengers.

4. Contingent Watercraft. This liability insurance provides the excursion insurance requirement for tour operators with any type of motorized or non-motorized watercraft that provide transportation to cruise passengers. 5. Worldwide Jurisdiction. Cruise passengers come from all over the world, as do resort guests. If one of those guests is injured during a shore excursion, the question of legal jurisdiction is not always clear. That is why it is so critical for a tour operator to have excursion insurance with worldwide jurisdiction.

6. Coverage from a Carrier with a High Credit Rating. For excursion insurance to be acceptable to cruise lines and resorts, it must have coverage from a carrier with a high credit rating. Specifically, the carrier must hold an A- rating or higher from A.M. Best.

Page 3

Who Needs Excursion Insurance?

People often confuse travel insurance with excursion insurance. If you are a cruise passenger or resort guest going hang gliding in Cabo San Lucas, mountain biking in Puerto Rico or bus touring in a city where your cruise ship has docked, you may want to purchase travel insurance. You absolutely, positively do not need excursion insurance. In fact, if you try to buy such a policy, you will find out it is not available for travelers, adventurers or cruise ship passengers. The term “excursion insurance” applies to insurance coverage for excursion tour operators. If you are a tour operator, you need this coverage in order to have your particular tour recommended to travelers and passengers by hotels and cruise ships. If you are a tour operator without excursion insurance, you will not be recommended or put on any list of approved tour operators.

Excursion insurance: Insurance for tour operators

All tour operators in any city who offer local tours to passengers of cruise ships during the time the ship is docked need excursion insurance. This type of insurance covers not only the risks travelers might experience while on your private tour, it will protect your excursion business in the event of any unexpected incident. There are several types of insurance coverage that are generally required. Here are a few of them and a brief overview of the protection the specific types provide.

Types of Excursion Insurance

• Commercial General Liability Insurance: This is the type of policy that covers your tour

business for personal or property damage a user of your services claims they suffered while using your excursion services. If someone suffers some type of personal injury while on your excursion, this is the type of coverage that will pay those claims. The insurance will also pay for defense of claims you or your insurance company perceive as unwarranted.

• Contingent General Liability Insurance: The Contingent General Liability insurance

coverage should include third party claims for personal injury, property injury and loss and the legal cost in settling the claims. The claims against tour operators can be settled out of court but there is usually a monetary settlement involved that could bankrupt the tour operator without adequate insurance.

Page 4

• Contingent Auto: This insurance covers:

- Damage to the vehicle from the person using it - Injury and property damage or loss to participants on the tour if an accident occurs - Medical expenses for injuries

• Contingent Watercraft: This insurance covers:

- Damage to the 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.

• Worldwide Jurisdiction: Most countries require people to bring legal actions in the country where the injury occurred as opposed to the home country of the person that has been injured. That is why it is so critical for a tour operator to have excursion insurance with worldwide jurisdiction.

• Coverage from a Carrier with a High Credit Rating: The carrier must hold an A- rating or higher from A.M. Best. This high rating ensures the carrier has the financial means to meet its financial obligations to its clients in the event of a claim

Other types of excursion coverage may be appropriate for your particular business depending on the type of tours you conduct. When choosing coverage, you also want to be certain that whatever type of excursion insurance you purchase, it provides coverage in all geographical areas where you operate tours.

Page 5

What Does Excursion Insurance Cover?

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.

If the injured passenger must be airlifted to another hospital, the cost will be enormous. 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 Canada, but he or she can file that claim from anywhere.

Page 6

Why Does Worldwide Jurisdiction Matter to Tour Operators?

The cruise industry by its very nature is a worldwide industry with cruise ships covering the Globe putting into ports in countries with very 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 passengers 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 worldwide jurisdiction for liability is not limited to the country where the tour service is located. Worldwide 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.

Page 7

What Are AM Best Ratings and Why it Matters to Excursion Operators

As an excursion operator offering mountain biking or catamaran tours, one of the last things on your mind is what the insurance rating is for your insurance company. However, if you are a tour operator wanting to work with cruise lines it’s important that you are aware of the insurance rating of your insurance provider so that you can make sure you comply with the cruise line’s requirements.

Insurance Rating Requirements for Excursion Operators

All 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.

All cruise lines want to know the name of the insurance carrier that covers your tour and transportation services before they contract with your company. This is one of the excursion insurance requirements. If a mishap occurs to a cruise ship passenger on a land tour, the cruise line is not responsible.

Page 8

Summary

We hope that by reading Excursion Insurance 101 that you have learned about why Excursion Insurance is important to tour operators. If you are a tour operator and have additional questions about what Excursion Insurance is, what it covers or why you need it, feel free to contact us. We are happy to discuss your insurance needs with you. Ken Furlow Vice President Miami Lakes, FL 33016 Direct +1 (305) 512-0591