No state requires a travel agent to carry errors and omissions coverage as a condition of selling travel. That answer disappoints people, because it sounds like permission to skip it.
Here is what actually forces the question. Host agencies require proof before they will contract with you. Consortia require it for membership. Cruise lines and tour operators ask for a certificate before they will set you up as a selling agent. And California, Florida, Hawaii and Washington, the four states that register sellers of travel, ask questions about your financial responsibility that get easier to answer when you carry coverage.
The claim is almost never what agents expect
Ask an agent what they are afraid of and they describe a lawsuit. Ask a claims adjuster and they describe a Tuesday.
A return flight booked for the wrong month. A passport name that reads "Kate" when the document says "Katherine." A client who was told the resort renovation would be finished, because that is what the supplier said in March. A honeymoon package where the cancellation deadline passed four days before the couple asked about moving the dates.
None of those are negligence in the dramatic sense. They are ordinary mistakes in a job with a hundred small deadlines, and any one of them can produce a demand for the cost of a trip that is already paid for.
Defense costs arrive before fault does
The number that surprises agents is what it costs to be right.
When a client sends a demand letter, someone has to answer it. If they file, someone has to appear. That happens whether the claim has merit or not, and the bill comes long before anyone decides who was at fault. Coverage pays that defense from the first response, which is the part that keeps a $6,000 dispute from becoming a $20,000 legal problem.
What a policy will not do
E&O responds to financial loss caused by your professional work. It does not cover:
- Someone tripping in your office — that is general liability
- A breach of the passport scans in your inbox — that is cyber liability
- An employee hurt on the job — that is workers compensation
- Deliberate dishonesty, or a claim you already knew about when you bought the policy
That last one matters more than it reads. Professional liability is written on a claims-made basis, and every application asks whether you are aware of any circumstance that could produce a claim. Answering that question carelessly is how coverage gets rescinded later.
Volume is not the test
Agents who book fifteen trips a year assume the exposure scales with the volume. It scales with the size of the trip.
One destination wedding with twenty-two guests, one multi-generational cruise, one $40,000 safari — a single error on any of those produces a claim as large as anything a full-time agency will see. The agent booking two of those a year and the agent booking sixty are exposed to the same worst day.
What to ask before you buy
Four questions separate a policy that will work from one that will not:
- What is the retroactive date? It sets how far back your prior bookings are covered. A brand-new policy with today's retroactive date covers nothing you have already sold.
- Is the limit per claim or shared? A limit shared across a host agency's roster can be spent by someone else's claim.
- What does the tail cost? Claims-made coverage stops responding when it lapses. The extended reporting period is what protects your past work when you retire, sell, or switch carriers.
- Does it cover the work you actually do? Groups, tours, charters, and destination weddings are sometimes rated or excluded differently than individual leisure bookings.
If you are switching carriers, the new policy should pick up your existing retroactive date. Starting fresh leaves every booking you have made so far outside both policies.