Experts point out that both service providers and insurers are adapting to a more intricate and rapidly changing risk landscape. Liability coverage is increasingly viewed not just as an ancillary safeguard but as a core aspect of how tourism entities design, implement, and expand their offerings.
A sector evolving past conventional risks
Historically, hospitality liability was mainly centered around foreseeable in-house incidents like slips, falls, or damages to property. That model is now being challenged by the emergence of curated travel experiences that extend beyond traditional hotel settings.
Rohit Kohli, Joint Managing Director at Creative Travel, a family-run Destination Management Company (DMC) in India, observes that as travel shifts towards experience-centric models, insurance becomes intertwined with fundamental business planning.
In his opinion, liability protection is now incorporated into the overarching strategy of operating a travel business, rather than merely viewed as an external compliance obligation.
This transformation mirrors the diversification of tourism offerings into categories such as adventure activities, wellness programs, and tailored itineraries, all of which present unique operational dependencies and exposure risks.
Areas of heightened risk
As guest expectations change, so does the landscape of liability exposure.
Evaa Saiwal, Head of Cyber & Liability Insurance at Policybazaar for Business, highlights a broadening risk landscape across hospitality operations.
Incidents involving guests now cover various touchpoints, including adventure activities, wellness services, food allergies, and safety concerns related to amenities like pools and spas. Responsibility can also extend to third-party partners — such as excursion operators, transportation services, and activity vendors — distributing accountability more widely than ever before.
In addition to physical risks, the threat of cyber incidents has emerged as a significant concern.
Hotels and resorts handle vast amounts of sensitive information, from identification documents to payment information, making them prime targets for cyberattacks. Breaches or system failures can lead to financial losses and undermine customer trust and regulatory compliance.
Insurers adjusting their coverage strategies
Consequently, insurers are revising their methods for risk evaluation and coverage structuring.
Saiwal notes that contemporary underwriting practices are influenced by operational preparedness.
Prior to issuing policies, insurers assess how hospitality businesses manage risk — focusing on security protocols, access controls, employee training, vendor management, cyber hygiene, and incident response capabilities.
This approach signifies a transition from a static model of risk classification to a more dynamic, behavior-oriented assessment of business operations.
The design of insurance products is also becoming more specialized. Rather than broad hospitality coverage, insurers are developing focused policies for specific travel segments, such as adventure tourism, wellness retreats, aquatic activities, and high-end experiential travel, where risk profiles significantly differ from traditional hotel settings.
Cyber insurance is emerging as a distinct and expanding layer within this structure, propelled by the industry’s reliance on digital booking platforms and data-rich customer interactions.
Insights from travel businesses
Dev Karvat, Founder & CEO of Asego, a travel assistance and insurance service provider, noted that premium travelers now demand “seamless execution across all touchpoints,” from bookings and visa processing to supplier management and on-ground support.
He emphasized that even minor operational slip-ups can quickly lead to financial, legal, or reputational repercussions for travel companies.
Karvat added that the range of risks in the sector has expanded beyond trip disruptions to include documentation errors, supplier failures, employee fraud, lost passports, and liabilities arising from third-party or vendor-related incidents.
He mentioned that this has resulted in an increasing demand for specialized liability protection solutions tailored for travel operators, especially within the high-net-worth and experiential travel markets. He noted that structured products like Travel Business Protect (TBP) have been created to fill this gap by covering aspects such as legal defense costs, operational errors and omissions, supplier-related risks, and customer liability issues that can impact business continuity.
