Maryland’s new seller registration law for travel agents took effect on October 1, but the state has not yet provided a way for businesses to register. The Maryland Department of Labor is still working on the regulations needed to implement the law.
Legal Limbo for Travel Sellers
This leaves travel agencies in a difficult position. The statute bars anyone from receiving payment for travel services unless the seller or independent contractor has already filed. Read literally, that means every agency that has accepted a Maryland client’s payment since Oct. 1 is in violation, even though the state has given you no way to file.
However, it is unlikely that a court or government agency would penalize a seller for failing to comply with a law that cannot be followed. The Department of Labor is currently considering the legal and practical issues surrounding the law, including the requirement for sellers and independent contractors (ICs) to file proof of “professional liability and errors and omissions insurance” and pay an annual $300 fee.
Insurance Requirements and Ambiguities
One of the main questions is whether every IC needs to obtain a $1 million insurance policy or if they can rely on their host’s insurance. The law also does not clarify whether the $1 million limit is per claim or in the aggregate. Additionally, it is unclear if ICs with sub-ICs need to ensure that everyone has their own insurance policy.
The law’s requirement for “professional liability and errors and omissions insurance” is also ambiguous, as these are typically two names for the same coverage in the insurance industry. The American Society of Travel Advisors (ASTA), which opposed the bill, has asked the state’s attorney general for a legal opinion on the law.
What Travel Agencies Should Do
In the meantime, travel agencies should confirm that their E&O policy has limits of at least $1 million (both per claim and in the aggregate) and check if it covers their ICs. ASTA members can rely on the organization to publicize the availability of registration once it becomes available. Agencies should also periodically check the Department of Labor’s Sellers of Travel Services Registration page for updates.
