The Top 5 Legal Issues for Travel Counselors
Last week at the American Society of Travel Advisors (ASTA) global convention in San Francisco, California, travel industry attorney Jeffrey Ment, who has more than 30 years of experience in the industry, gave attendees an overview of five important travel legal topics. Advisors.
It will always be best to have a lawyer personally diagnose potential legal issues for your agency. But for advisers who want to know why it’s so important to have a lawyer to talk to, or those who want to be on top of things that could affect their business, here are the top five legal issues for travel advisers in the session. of Ment:
1. Social media and duty of care
There have always been questions about the duty of travel advisors to inform and advise customers about potential dangers in the destinations to which they are traveling. But a recent news story about a travel agent being sued over the death of a client in Mexico has brought these issues to the fore.
The story involves a travel agent who was sued after his client was allegedly killed on a trip to an all-inclusive Cancun. The travel agent had published an article about minimizing danger in Cancun after a warning from the US State Department advised Americans to exercise caution when traveling to their destination. The agent, in a message, relayed information from the Cancun Sun, a newspaper that Ment said “hopes to promote tourism in Cancun.”
While the end of this story is yet to be written, the question for travel advisors is how far you go by posting on social media. The customer’s death “is not the fault of the travel agent,” Ment said, but there are steps travel advisors can take to better protect themselves and their business.
Ment recommends submitting “verifiable and reliable data and thinking twice before publishing,” he said. “There is a fine line between promoting and encouraging travel.”
He also said all advisers should be “careful” in what they say, including avoiding certain phrases, including things like “risk-free, harmless” or 100% safe”.
2. Seller’s Travel Law Compliance
Travel law sellers can be a tricky thing for many travel advisors – questions about what law applies in which states and how those laws affect advisors with clients in other states are quite common, in especially among new entrants.
“It’s a difficult subject. There is a difference between what the law says and what you may or may not have to do,” Mment said.
Currently, four states have travel seller laws on the books: California, Washington, Hawaii, and Florida. Each of these states has different requirements for obtaining the license; each license is expensive and time consuming for advisors.
Hawaii, for example, requires advisers living in the state or serving clients in that state to have a bank account at a branch in Hawaii, a state that doesn’t have a ton of national chains there. Other states might only require a bond that is easier to obtain than opening a Hawaii-based bank account.
Advisors must be able to make their own decision about obtaining a license. This consideration of time and money must be balanced with the volume of business they do in that particular state. Does an adviser have to give up their activities and also give up the licensing requirements? It depends on each business owner.
“Is it important to you? How many customers do you have? Are you located there? Are you a member of a licensed hosting agency or consortium? Maybe you are already benefiting from it,” added Ment.
3. Independent Contractor (IC) Agreement Terms
Independent Contractors (ICs) are the fastest growing segment of the travel advisor community by nearly every measure. And with that growth came an equally growing set of legal concerns, including what should and shouldn’t appear in an IC agreement.
One of the trickiest points in IC agreements are non-competition clauses, which prevent agency owners or host agencies from having their ICs work elsewhere while they are still connected. These clauses “are a very interesting legal question,” Ment said because of the way they limit the work capacity of a “self-employed” worker. Mment said the deals would be “looked at very closely if ever a judge is asked to do so.”
That doesn’t mean agency owners can’t include non-compete clauses in their IC agreements, it just means they have to be careful how they word and apply them. For example, agreements should use “non-solicitation” and “non-disclosure” rather than “non-competition”.
There are also considerations depending on the situation in which state councilors operate. Several states and districts do not allow non-competition clauses for COIs, including California, North Dakota, Washington DC and Oklahoma, places where advisers must “be very careful to have them,” Ment said.
The bottom line, like many of these legal issues, is that it’s best to ask a lawyer for specific responsibilities and wording. ASTA also offers a model agreement for all members on its website.
4. Errors and Omissions and Other Insurance Considerations
Errors and omissions (E&O) insurance, or professional liability insurance, is another one of those recurring issues that travel counselors and agency owners need to be aware of. Mistakes happen, and this type of insurance helps protect advisors against those mistakes when they inevitably happen.
Advisors who are part of a host may already have errors and omissions insurance in that relationship, but it’s important to ask about it, Ment said. And each provider covers different things in their E&O offerings, so it’s also important if advisors are taking out the insurance themselves, to read the full policy.
Ultimately, the general definition is that errors and omissions insurance “covers professional liability while you are in the performance of the operations of a travel agency”, which includes
More importantly, according to Ment, is what it does not necessarily cover, namely:
- Breach of contract.
- Allegations of fraud, consumer protection, unfair trade or unfair competition.
- Intentional things, such as property damage, fraud or dishonesty.
- Pricing or Dispute with Charges.
- Violation of non-competition clauses with CIs.
- Refund Arguments.
It’s not just errors and omissions insurance that advisors need to know about. There is general liability insurance, which covers some general risks for business owners. That insurance is important for advisers running a brick-and-mortar business, but “isn’t important” like others if you don’t, Ment said.
There is also cyber liability insurance, which protects those who do business on the Internet. It helps protect against the risk of saving protected information like credit card numbers or emails.
The advent of the Internet over the past few decades has created another concern for advisors: trademark considerations. Advisors and agency owners, who are now seemingly in competition with every other agency in the world, should take heed, Mr.
“The new world is that if you’re advertising, marketing, building a brand, selling your brand, it’s important to at least have the conversation,” Ment said.
Trademark is an incredibly specialized area of law, which increases the need for advisors and agency owners to speak to outside counsel if they want to go through the process.
“It’s important because it sort of identifies who you are. It can prevent others from becoming someone like you,” he said.
Considerations advisors should make before beginning the process include:
- What is the name of my company?
- Is it important to me?
- Am I getting business out of it?
- Do I market it?
“If you do that and it helps you establish yourself, that might be something to consider,” he said. “I have a lot of agency clients in the Disney space, and it’s very competitive. So some of them try to trademark these different elements of their business because they think it will help to stand out.
“It’s a good idea. You should think about it,” he added.