Indonesia’s tourism industry, from resorts and hotels to water parks and ecotourism to adventure outings, offers visitors an extraordinary experience. However, behind the beauty of the beaches or the thrill of jungle trekking, there are risks that can impact your business at any time: visitors slipping, equipment breaking, or tourism activities causing damage to third-party property. Here’s why public liability insurance has become an absolute necessity for tourism industry players, not just an option.
But simply having a policy isn’t enough. Choosing to go through an agent or go directly to the insurance company can leave you without support in the event of a claim. This is where insurance brokers, like L&G Insurance Broker, are very crucial: we are not just a policy supplier, but your partner for risk analysis, selection of the best product, and support until the claim is actually paid out.
👉 Free consultation via WhatsApp 08118507773 or email halo@lngrisk.co.id to evaluate your tourism business needs.
This article will discuss why travel businesses should have public liability insurance, what risks to prepare for, how to choose the right policy with a broker, and how L&G can help ensure your business is fully protected.
Why is the Tourism Industry High Risk?
The tourism business has distinct characteristics compared to many other sectors: large numbers of visitors (often from out of town or abroad), physical and outdoor activities that sometimes involve heavy equipment or rides, and direct interaction with nature or rental properties that are not owned. All of these elements increase exposure to third-party risks. Some examples:
- Visitors to the resort using rental bikes fell and suffered broken bones due to unsafe trail conditions.
- Zip-line or flying fox rides that are damaged and cause injuries, or equipment that is poorly maintained.
- The water park floor is slippery due to the water flow, causing visitors to slip and suffer serious injuries.
- Ecotourism or trekking activities in the forest where visitors slip and vendors or operators are considered negligent in safety.
Various sources state that tourism businesses should consider general public liability insurance as part of their protection portfolio. For example, one article points out that tourism businesses such as lodging or tour operators should consider the risk of injury or property damage due to tourism activities.
Therefore, ignoring public liability insurance can make your business vulnerable not only financially, but also in terms of reputation, which can be destroyed in an instant.
What Is Public Liability Insurance and Why Is It Important for Travel?
Let’s break it down clearly: public liability insurance is a policy that covers your legal liability (as the organizer or business owner) to third parties who suffer injury or property damage as a result of your activities. In the context of the tourism industry, visitors, vendors, or guests could be third parties.
What is covered?
- Bodily injury or death of a third party (example: a visitor slipping on your ride).
- Damage to third party property (examples: rental bikes, guest vehicles, vendor property damaged at your location).
- Legal and defense costs when there is a lawsuit against you.
- Sometimes emergency medical expenses if you do choose that coverage.
Why is it so important?
- Many tourism property leases or partnership contracts require that operators or owners have an active public liability policy, without which you could lose business opportunities.
- The physical risks and property damage in the tourism industry are quite high and unpredictable, ranging from nature, weather, to visitor behavior.
- Having a policy demonstrates your professionalism to clients, investors, and partners, increasing trust.
- If a major incident occurs, the financial burden can be enormous without proper protection.
A number of studies have shown that tourism businesses should include third-party liability insurance as part of their protection strategy.
So, if you operate a resort, water park, recreation park, or other outdoor tourism activities, purchasing public liability insurance is not an option, but a necessity.
Specific Risks That Often Occur in the Tourism Industry
To make your protection more concrete, here are some specific risks that travel businesses often face and how they can claim protection:
- Outdoor Activities & Adventure
Adventure tourism (zip-lining, off-roading, rafting) generally carries a higher risk. Research suggests that tour operators offering extreme activities should consider greater coverage.
Example: trekking tour in the forest, visitors slip on slippery paths, sue the operator because there are no officers or safety standards.
- Accommodation & Guest Facilities
Resorts or accommodations with spas, pools, water parks, and bicycle or jet ski rentals all increase the potential for claims. Visitors can suffer injuries due to poorly maintained facilities.
- Water Park & Recreation Park
In water areas, slippery floors, slides, and lazy rivers can all lead to accidents. If warning signs or supervision are not in place, the operator could be sued.
- Rental Properties / Third Party Vendors
In many tourism cases, you may rent land or work with third-party vendors. If these vendors damage guest property or guests are injured by them, you as the operator could still be subject to lawsuits.
- Natural & Environmental Impacts
Tourism businesses operating in vulnerable areas (landslides, extreme weather, tsunamis) face high exposure. Sources state that the location and type of tourism business significantly influence insurance rates and coverage.
By understanding these risks, you can work with your broker to tailor a policy that is not too common, but truly suits the needs of your travel business.
Why Go Through a Broker Like L&G, Not an Agent or Insurance Company Directly
This is the most crucial part and is often where tourism businesses make mistakes.
Insurance Agent
Agents typically work for one or more insurance companies. Their primary responsibility is to sell products. However, when a major claim arises, agents often lack the authority or capacity to fully support you until the claim is paid.
Direct Insurance Company
It seems like a quick fix: you buy directly through the company. But the downside: you’re on your own in the claims process. There’s no independent advocate for you.
Independent Brokers Like L&G
- Representing you (the customer), not the insurance company.
- Have access to many companies and products to compare and choose the best fit for your travel business.
- Helping you determine the coverage needs, limits, special exclusions, and policy features that suit your travel business risks.
- When a claim occurs: the broker will guide, accompany, prepare documentation, negotiate and ensure the claim is truly paid out.
- Make sure you don’t buy a policy that looks cheap but has lots of exclusions that could cost you money in the future.
In other words, buying insurance through a broker isn’t an “additional expense,” but rather a protective investment that can save you from significant losses. If an incident occurs and you don’t have strong claims coverage, what protection will your policy offer? This is why we at L&G always say: “Don’t just buy through an agent, don’t go directly to the company; choose a broker.”
How the Collaboration Process with L&G for the Tourism Industry Works
If you are the owner or manager of a tourism business (resort, water park, tour operator, recreation park), here are the steps how L&G Insurance Broker will help you:
- Risk Analysis
Our team conducts on-site (or virtual) visits to understand the type of activity, your facilities, average visitor numbers, facility conditions, and special risks (outdoor, water, adventure). - Custom Policy Design
Based on the analysis results, we compile relevant coverage: for example, adding adventure activities, water rides, equipment rentals, or swimming pools. - Product and Premium Negotiation
We research multiple options from multiple insurance companies, compare premiums, limits, exclusion/endorsement features, and choose the best one for your cost-benefit. - Policy Issuance & Education
Policies are issued with clear wording. We explain the terms and conditions, special exclusions, and how you can mitigate risks to keep premiums competitive. - Claims Assistance
In the event of an incident, such as a visitor injury or vendor property damage, the L&G team is available 24/7 to assist you. This includes gathering evidence, coordinating with insurance companies, and ensuring smooth payment. - Regular Review & Updates
Because the tourism business is constantly evolving (e.g., adding new attractions, increasing visitor capacity, expanding to new locations), we review our policies annually to ensure coverage remains relevant.
Strategic Benefits of Having Public Liability Insurance
Having a policy for the travel industry is not just about “protecting against lawsuits” but also a profitable business strategy:
- Increase visitor and partner trust: When you can show that your business is well protected, partners (land leases, outdoor vendors) will be more confident in working together.
- Meet the requirements of cooperation and regulations: Many government agencies or investors require tourism businesses to have active liability insurance.
- Maintaining business reputation: If an incident occurs and you can resolve it through insurance, your reputation remains safe compared to competitors who are not prepared.
- Operational continuity: If an incident occurs without protection, it can be a financial burden and even lead to operational disruption. With insurance, you can continue providing services while claims are pending.
- Facilitate business development: New rides, expansion locations, or additional swimming pools will be more easily considered by funding parties or banks when you already have risk protection.
Common Mistakes in the Travel Industry & How to Avoid Them
To ensure your business is optimally protected, avoid the following mistakes:
- Perceiving low risk because it’s “just a small swimming pool” or “just a day tour,” the risk remains and could lead to third-party lawsuits.
- Purchasing a standard policy without changing the wording for specific travel activities (water rides, zip-lines, outdoor adventures) means that when you make a claim, it turns out it is not covered.
- Does not include setup or breakdown activity periods, even though many incidents occur during setup or breakdown.
- Failure to mitigate internal risks: for example, slippery floors without safety guards, exposed wiring, or inadequate supervision. Policies can be helpful, but they are not a substitute for sound risk management.
- By neglecting to choose a broker who is willing to assist you with a claim, you could be left “alone” when a large claim arises.
By working with a professional broker like L&G, you can ensure all these aspects are well taken care of.
Case Studies of the Tourism Industry Covered by the Policy
Here is a real illustration (based on global but relevant data) that illustrates the importance of public liability insurance:
- An Australian adventure tour operator offering zip lines and outdoor activities faced a claim after participants were injured by poorly maintained cables. A comprehensive liability policy covers not only medical expenses but also legal costs and compensation.
- A resort renting jet skis has an accident; guests are injured and sue for compensation. With the right liability policy, operators don’t have to pay out of pocket.
- Accommodations in eco-camping zones are subject to visitor claims due to landslides in their trekking area due to negligence in trail management. Liability insurance provides a financial lifeline.
These cases demonstrate that without proper protection, a travel business can be “destroyed overnight” by a large claim, and only an experienced broker can help you prepare for such situations.
Cover
For a travel business, your success and reputation are built on the visitor experience, but safety, security, and preparedness for risk are the unseen foundations. By purchasing public liability insurance, you shift the burden of risk that could destroy your business at any time. But more importantly: don’t buy through an agent or directly from an insurance company because when a big claim comes, only an insurance broker like L&G Insurance Broker will truly stand by your side, accompanying you until your claim is disbursed.
💬 Contact us now for a free consultation and ensure your travel business is fully protected.
📞 WhatsApp: 08118507773
📧 Email: halo@lngrisk.co.id
L&G Insurance Broker — Your partner in addressing unseen risks, so you can focus on building exceptional experiences for your visitors.
