When Do I Require Insurance?
Certain Supplier Partners of Nomad Stays are required to have Liability and Insolvency coverage before they can be listed.
This applies to:
- Experience Operators who fall under the EU Travel Directive,
- When your local country requires it
Experiences include workcations, staycations, nomad tours, retreats, multi-day business workshops and offsites etc.
Insurance is the main method of achieving coverage, although not the only method.
Operators of these services are required to indemnify both guests and Nomad Stays for any claims that arise from the provision of your services,
As the EU is the largest and most strict market covered by travel laws, we use the EU Package Travel Directive as the guideline to our own global policies.
When Does the EU Package Travel Directive Apply?
The (new, new) EU Package Travel Directive is a body of laws that operate worldwide to give a level of legal coverage to all EU residents who travel.
The laws basically cover travel operators who supply a combination of 2 of the following services as part of a package, or are somehow linked by the operator:
- transport,
- accommodation,
- car rental or
- other travel services, for example excursions & guided tours
Any operator worldwide selling to EU residents is likely to be caught by the laws.
The Directive can be found at https://commission.europa.eu/law/law-topic/consumer-protection-law/travel-and-timeshare-law/package-travel-directive_en
What Coverage Do I Need?
If caught by the package travel rules you are required to have external protection for clients, and Nomad Stays, in 2 main areas:
- Liability, and
- Insolvency
Liability Coverage
Liability Coverage means having a mechanism to cover guest claims when you fail to provide something in their package to the guest, or some damage occurred to them or their property while undertaking your service.
Example: Your Workation Package included a snorkeling trip with whale sharks. For some reason the snorkeling trip failed to happen, and a guest was upset claiming their whole workation choice was based on that excursion. If successful, the guest will be entitled to a significant refund of their package as well as extra costs for the inconvenience.
Insolvency Coverage
Insolvency Coverage is about protecting guests when your business goes bankrupt or into insolvency.
Typically, this is a problem if it happens while guests are on one of your packages.
If this occurs you will be required to arrange the guest to be returned to the starting place of the experience. If you're out of business, it's unlikely you can pay for this return from your own funds, so having an external guarantor like an Insurance policy is generally required.
Exclusions
The EU Package Travel Directive is complex. It does include a series of exclusions.
- The most common exclusion is where more than 14 days of accommodation are provided according to EU Travel Tech (formerly The European Technology and Travel Services Association - ETTSA). Accommodation provided for longer than 14 days is considered 'residential' accommodation and therefore outside the EU Package Travel Directive.
- https://eutraveltech.eu/wp-content/uploads/2019/11/ETTSA-publishes-Industry-Guidance-for-compliance-with-EU-Package-Travel-Directive.pdf
- Note: If your Experience combines any 2 other non-accommodation types of travel services then you may fall under the Directive.
The following range of exclusions is taken from the Directive: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32015L2302
Only the combination of different types of travel services, such as accommodation, carriage of passengers by bus, rail, water or air, as well as rental of motor vehicles or certain motorcycles, should be considered for the purposes of identifying a package or a linked travel arrangement.
Accommodation for residential purposes, including for long-term language courses, should not be considered as accommodation within the meaning of this Directive.
Financial services such as travel insurances should not be considered as travel services.
In addition, services which are intrinsically part of another travel service should not be considered as travel services in their own right.
- This includes, for instance, transport of luggage provided as part of carriage of passengers,
- minor transport services such as carriage of passengers as part of a guided tour or transfers between a hotel and an airport or a railway station,
- meals, drinks and cleaning provided as part of accommodation,
- or access to on-site facilities such as a swimming pool, sauna, spa or gym included for hotel guests.
This also means that in cases where, unlike in the case of a cruise, overnight accommodation is provided as part of passenger transport by road, rail, water or air, accommodation should not be considered as a travel service in its own right if the main component is clearly transport.
Other tourist services which are not intrinsically part of carriage of passengers,
- admission to concerts, sport events, excursions or event parks, guided tours, ski passes and rental of sports equipment such as skiing equipment, or spa treatments.
- However, if such services are combined with only one other type of travel service, for instance accommodation, this should lead to the creation of a package or linked travel arrangement only if they account for a significant proportion of the value of the package or linked travel arrangement,
- or are advertised as or otherwise represent an essential feature of the trip or holiday.
- If other tourist services account for 25 % or more of the value of the combination, those services should be considered as representing a significant proportion of the value of the package or linked travel arrangement.
For more information or to discuss your own situation feel free to contact us at CONTACT US