If I’m an independant contractor, does the agency’s EO insurance cover me?

UPDATED: Sep 30, 2022

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If I’m an independant contractor, does the agency’s EO insurance cover me?

I am a travel agent, an independent contractor for a large travel agency. I put together a quote for a trip to Europe which the client confirmed they wanted to deposit. They filled out and signed the credit card form for the agency and I signed the credit card for from the tour operator. Immediately following their written consent by email to charge the deposit the trip, the client changed their mind. I immediately within a few hours informed the tour operator to not charge the credit card but they did and they will not return the clients money now saying it is a non refundable deposit. The client is now telling me he will sue both me and the tour operator for the funds. Am I responsible and if so does EO insurance cover me?

Asked on April 24, 2017 under Employment Labor Law, New Jersey


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) A business's EO insurance does not cover independent contractors, which are legally their own businesses and which need to maintain their own insurance.
2) You are liable or financially responsible only if they can show you were negligent, or careless, and that negligence contributed to the loss. If you delayed contacting the tour operator, even by a few hours, and that delay is the reason the charge went through, that could make you liable, since it was careless to delay and that delay led or contributed to the loss. However, if you contacted the tour operator as soon as you knew, then you did everything you could, were not negligent or careless, and should not be liable.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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