Insurance indemnity to assist tour agents

Business Asia, August 17, 1998

The introduction of a professional indemnity insurance for tour operators is being planned by the National Association of Travel Agents Singapore (Natas) to give the Singapore tourism industry a boost.

Natas chief executive officer Mr Renton de Alwis said the insurance concept would give Singapore a regional advantage because European tour operators would prefer to partner Singapore-covered operators. They would then "co-share" the risks of consumer law suits.

For example, a European consumer might sue his European travel agent for a travel package which fell short of what was promised. If the fault arose from the Singapore partner who co-arranged it, the latter's insurance company would take care of compensation. If the regional partner did not have this insurance, the European side would have to pick up the full tab.

Japan is believed to be the only Asian country with such a scheme currently operating.

The development was prompted by a European Commission directive in 1995, which allows consumers in member countries to sue tour vendors who fail to deliver advertised packages.

Mr de Alwis said under the scheme "foreign operators would have an incentive to partner Singapore-covered agents as they can be more assured of quality, as well as compensation if this falls short".

Local operators could benefit from this advantage by arranging more tours to the region, he said.

Professional indemnity insurance is available in Singapore for lawyers and doctors.

However, the tourism industry proposal is a first for that sector. About half of Singapore's 600-odd travel agents are leisure tour operators.