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What is Travel Agency Insolvency and Professional Liability Insurance?

The tourism sector is a field where dreams are sold, but operational risks are very high. As a tour operator or travel agency, you promise your customers a “dream vacation.” However, situations such as the hotel losing the reservation, the airline canceling the flight, a transfer vehicle having an accident, or worst of all, the agency going bankrupt due to economic reasons can turn this dream into a nightmare. Travel Agency Professional Liability Insurance (known in the sector as Mandatory Package Tour Insurance) is a legal requirement that ensures customers get their money back or have their grievances resolved in the event the agency cannot provide the promised services due to fault or insolvency.

At Panacea Insurance, we both fulfill the legal responsibilities of our TURSAB-member agencies and protect their brand reputation. Remember, this insurance does not cover the customer’s mistakes; it insures your (the agency’s) errors or deficiencies.

Legal Requirement and Law No. 1618

In Turkey, every agency organizing a package tour (tours including at least two of Transport + Accommodation + Other services and exceeding 24 hours) must have this insurance and provide the certificate to the customer. Article 12 of Law No. 1618 on Travel Agencies and the Association of Travel Agencies and the “Regulation on Package Tour Contracts” are the basis of this obligation.

• TURSAB Audit: The existence of these policies is audited by TURSAB to ensure agencies can renew their certificates of operation and conduct tours.
• Customer Trust: Conscious travelers ask for the “Mandatory Insurance Policy” when purchasing a tour. This document is proof of the agency’s corporate status.
• Insolvency Protection: Even if the agency goes bankrupt, the customer can recover their money from the insurance company. This is the strongest clause protecting the consumer.

What Does the Policy Cover?

The policy offered by Panacea Insurance focuses on the agency’s commitments from the beginning to the end of the tour:

• Failure to Provide Service: The tour not starting or being canceled for reasons other than force majeure.
• Incomplete Service (Defective Service): Being taken to a 3-star hotel when a 5-star hotel was promised, or the failure to conduct promised city tours.
• Insolvency Coverage: Refund of the tour price if the tour does not take place due to the agency’s bankruptcy.
• Repatriation: Costs of bringing customers back to the starting point (country/city) if the agency stops service during the tour.

A Frequently Confused Topic: “Travel Health” or “Agency Liability”?

Your customers and sometimes your staff may confuse these two products. The difference is vital:

Feature	Agency Professional Liability	Travel Health Insurance
Who does it protect?	The Agency (Its Errors)	The Tourist (Their Health)
What is the subject?	Breach of Commitment, Insolvency	Illness, Accident, Lost Luggage
Mandatory?	Yes (For Package Tours)	Yes for Visas (Optional otherwise)

Tip: Agencies often combine the two coverages and offer them as a “Package Policy.” At Panacea Insurance, we enable you to manage both risks in a single policy (or separately). For the policy required for visa applications, you can review our Schengen Visa Travel Health Insurance page.

Security of Your Agency Office

This insurance protects the tours. But what about the computers, ticket stocks, and servers in your agency office? Don’t forget to take out Workplace Insurance for office risks and Directors and Officers (D&O) Liability Insurance for the decisions made by your management.

Which Situations are Paid?

Scenarios where the insurance kicks in:

Situation	Coverage Status
Hotel Reservation Not Made	✅ Paid (Service Defect)
Agency Insolvency/Failure to Run Tour	✅ Paid (Tour Price Refund)
Tourist Having a Heart Attack on Tour	❌ Not Paid (This is Health Insurance)
Cancellation due to Force Majeure (War, Earthquake, etc.)	⚠️ Subject to Policy Special Conditions
Tourist Arbitrarily Not Joining the Tour	❌ Not Paid

How Does the Claim Process Work?

When a disruption occurs:

1. Report: The fact that the service was not provided or was provided incompletely must be documented on-site with a report (signed by the guide and hotel official).
2. Application: The customer or the agency notifies Panacea Insurance of the situation.
3. Payment: If the agency’s fault is confirmed as a result of the loss adjustment, the refund is made to the customer by the insurance company.

You can find detailed information about the package tour contract regulations and agency obligations on the official website of the Association of Turkish Travel Agencies (TURSAB). Panacea Insurance is the solution partner of TURSAB-member agencies.

In conclusion, Travel Agency Professional Liability and Insolvency Insurance is the “Secure Ticket” for every tour you sell. Do not neglect this safeguard to avoid victimizing your customers, staining your brand, and facing legal issues. May your tours be enjoyable and your operations secure with Panacea Insurance. Have a great vacation!