Case Study 01: Why Liability Insurances are vital for every Tour Operator.

Case Note:

Thomas Cook India Ltd. vs Mr. Yogesh Singhal & Ors. on 1 July, 2024

Appeal in the Delhi State Consumer Disputes Redressal Commission

Facts of the Case

A family engaged Thomas Cook India Pvt. Ltd. to arrange a vacation to Sri Lanka and paid for a complete package that included accommodations, transportation, and sightseeing.

36 hours before departure, the family was informed that a third-party would manage the local arrangements in Sri Lanka. Concerned by this last-minute disclosure, the family contacted the Tour Operator, who assured them that they remained fully responsible for the trip’s quality and safety. Upon arrival on December 22, 2019, the family was provided with a driver, later found to be over-age and physically disabled. Tragically, on December 23, their vehicle collided with a truck, resulting in death of some family members.

Issues raised by Complainant

The primary issues were whether Tour Operator had failed in its duty to provide a safe travel experience, constituting a deficiency in service, and whether the company’s actions amounted to negligence due to its selection of an unfit driver.

Court Findings

The court found that Tour Operator acted negligently by failing to thoroughly vet the driver and was deficient in service, as defined by Section 2(11)(g) of the Consumer Protection Act.

By assigning an unsuitable driver and not disclosing the role of the third-party vendor until the last minute, the Tour Operator breached its duty to ensure a safe and satisfactory experience for the family.

The court emphasized that negligence, defined as the absence of reasonable care, resulted directly in harm to the complainant and his family.

Final Judgement

The court mandated the Tour Operator to pay INR 1 Cr to the complainant.

Conclusion

• This case underscores the critical importance of comprehensive Tour Liability insurance for every tour operator. The number of cases and damages levied by Court have generally increased in recent years. Hence, the tour operators by spending few thousands   can secure their financial stability.
• In addition to damages levied by Courts, there is substantial cost of lawyers i.e. Legal Defense costs. Defense costs and damages levied by Courts for similar deficiency of services in Europe / North America are substantially higher. Hence, it is important for a tour operator’s catering to European / American tourists to consider higher sum insured for the tour operator liability policy.
• As liability insurances are complex and complicated products, it is important to engage professional Insurance Brokers who have a thorough understanding of the product and provide support during the claims process.

Contact

Mr. Bawa Mohit Singh – M: +91 7447476172 or E: bawamohit.singh@safetree.in

Mr. Akarshit Sonkar – M: +91 9582743333 or E: akarshit@safetree.in