Travel Leaders Launches Insurance Plan for Cybercrime, Employee Fraud
By Mimi Kmet
August 14, 2012 5:06 PM
Travel Leaders Franchise Group has partnered with a major insurance company to launch an insurance plan for member agencies to protect them from cybercrime and employee and independent contractor fraud. The Network Security Endorsement, which the company rolled out in July after a successful pilot program last year, is designed to provide an affordable way for member agencies to protect themselves against these types of crimes. In addition, the policy expands existing coverage.
In providing the new coverage, Travel Leaders was responding to issues that its members had experienced, according to Steve Loucks, the company’s chief communications officer. “While the overwhelming majority of travel agents and independent contractors are honest, all it takes is for one rogue agent or IC to cost an agency tens of thousands, if not more,” Loucks said. “For most agencies, which are already operating under a very thin margin of profitability, that could be enough to put them out of business.”
He also pointed to a “continuous stream of notices from airlines and GDSs alerting us to phishing scams and other fraudulent activity, where again, all it takes is one unsuspecting agent to fall victim and provide sensitive data that in turn can easily result in a $15K to $20K hit to the agency.”
Among the plan’s highlights:
· Network security/cyber liability coverage is available to protect growing data privacy concerns, such as identity theft and failure to protect the confidential data of agencies’ clients. Agencies could be held responsible for the loss of this personal data and for reimbursing clients or other business partners, such as airlines or cruise lines, for this breach.
· Data privacy coverage covers issues such as liability coverage for identity theft, breach of privacy, failure to protect confidential client data, transmission of spyware, viruses, and malicious codes; and protection if somebody illegally gains access to Travel Leaders member agencies’ systems through the pass codes of their independent contractors, enabling them to book fraudulent tickets.
· Crime coverage in the business owners’ general liability policy covers the travel agency for loss of money or securities resulting from dishonest or criminal acts committed by employees or independent contractors. For example, an independent contractor may knowingly use stolen credit cards to book flights and then fraudulently sell those plane tickets to his or her customers at a discounted rate. While the independent contractor makes a profit, the travel agency is held accountable for the cost of the fraudulently purchased tickets. This policy extension would protect the agency against such fraud.
· The plan offers coverage for failure to provide travel insurance by an employee or independent contractor. For example, if an agent fails to file travel insurance that’s requested by a client, and a bad turn of events causes the client to file suit against the agency, that agency would be protected.
· Also included is coverage for independent contractors working for Travel Leaders member agencies under the E&O policy, the same as it would be for their own employees. For example, if an independent contractor sends a client on a trip to Egypt, and a revolution erupts shortly after arrival, the client could claim that the agency did not provide proper information about their risks, thus making the agency accountable for their losses. The new coverage would mitigate this risk for the agency.
The new policy provides Travel Leaders member agencies with a one-stop solution to handle all business insurance risks, including property, general liability, workers’ compensation and professional liability exposures such as E&O and network security and cyber liability. This allows for simplified billing, ease of doing business and fewer claims hassles at time of loss, according to the company. Travel Leaders member agencies also have free access to a human resources portal that provide all state regulatory, policy and human resources information, as well as a dedicated account team to help educate, inform and service their needs.