Experts emphasize that both operators and insurers are adapting to a more intricate and rapidly changing risk landscape. Liability coverage is transitioning from a secondary safeguard to a core element in the design, delivery, and scaling of tourism services.
A sector evolving past conventional risks
Previously, hospitality liability predominantly focused on predictable on-site incidents like slips, falls, or damages to property. However, this paradigm is evolving with the emergence of curated travel experiences that extend well beyond hotel grounds.
Rohit Kohli, Joint Managing Director of Creative Travel, a family-owned Destination Management Company (DMC) in India, observes that as travel focuses more on experiences, insurance is increasingly intertwined with business planning.
He believes that liability coverage is now a fundamental part of overall travel business strategy rather than merely an external compliance obligation.
This transformation highlights the expansion of tourism services into realms such as adventure activities, wellness programs, and tailored itineraries, each introducing unique operational dependencies and risk factors.
Identifying concentrated risks
As guest expectations change, so too does the landscape of liability exposure.
Evaa Saiwal, Head of Cyber & Liability Insurance at Policybazaar for Business, notes a broader risk landscape within hospitality operations.
Incidents related to guests now encompass multiple points of interaction, including adventure activities, wellness services, food allergies, and safety concerns linked with amenities like pools and spas. Often, responsibility extends to third-party partners—such as excursion companies, transport services, and activity providers—resulting in a more distributed accountability than before.
In addition to physical risks, cyber threats have become a significant structural issue.
Hotels and resorts handle substantial amounts of sensitive data, from identity documents to payment information, making them prime targets for cyberattacks. Data breaches or disruptions can lead to financial losses and impact customer trust and regulatory compliance.
Insurers are recalibrating their coverage strategies
In response, insurers are revising both their risk assessment methods and coverage structures.
Saiwal explains that contemporary underwriting is influenced by operational readiness.
Prior to issuing policies, insurers examine how hospitality businesses manage risk in real-time—assessing security measures, access protocols, staff training, vendor management, cyber hygiene, and incident response plans.
This methodology indicates a shift from static risk categorization to a more fluid, behavior-based evaluation of business operations.
Product offerings are also becoming more specialized. Rather than broad policies for the entire hospitality sector, insurers are crafting targeted coverages for specific travel formats, including adventure tourism, wellness retreats, water activities, and luxury experiential travel—all of which present significantly different exposure profiles compared to traditional hotel operations.
Cyber insurance is emerging as a distinct and growing component of this evolving landscape, propelled by the industry’s reliance on digital booking systems and data-intensive customer engagement.
Insights from the ground
Dev Karvat, Founder & CEO of Asego, a provider of travel assistance and insurance services, remarks that high-end travelers now demand “flawless execution across every touchpoint,” including bookings, visa processing, supplier coordination, and on-the-ground support.
He highlights that even small operational oversights can swiftly result in financial, legal, or reputational repercussions for travel companies.
Furthermore, he notes that risks within the sector have expanded beyond simple trip cancellations to encompass documentation errors, supplier defaults, employee fraud, lost passports, and liabilities stemming from incidents involving third parties or vendors.
Karvat emphasizes a growing demand for specialized liability solutions tailored for travel operators, especially in high-net-worth and experiential travel niches. He mentions that structured products like Travel Business Protect (TBP) are designed to fill this gap by covering aspects such as legal defense costs, operational errors and omissions, supplier-related risks, and customer liability situations that could disrupt business continuity.
