I cancelled my Bali retreat because of a volcano eruption. I refunded the yoga fees, but a student sued me for her $1,500 non-refundable flight, claiming “Promissory Estoppel” (she relied on my promise that the retreat would happen).
Key Takeaways
- E&O excludes Business Debts: Liability insurance pays for negligence, not refunds. It will not pay the student back.
- Contract Frustration: You need a contract that says “Not responsible for travel costs.”
- Travel Insurance: Mandate that students buy travel insurance. That is their remedy, not suing you.
- Force Majeure: Your contract needs a “God clause” (Volcanoes).
The “Why”: The Commercial Dispute
The Trap:
Insurance defends you if you hurt someone.
It does not defend you if you owe someone money.
This is a contract dispute.
Solution: A tight contract and mandatory student travel insurance.
The Investigation: The Solution
I didn’t quote liability carriers (they all deny this). I looked at Travel Insurance.
1. Trawick / Allianz
- My Analysis: If the student had “Cancel for Any Reason” insurance, they would have been reimbursed by Allianz, and you wouldn’t be sued.
2. Wetu / WeTravel
- My Analysis: Payment platforms often offer built-in travel insurance options for participants. Use them.
[IMAGE: Screenshot of “Force Majeure” clause in a retreat contract]
Comparison Table: Who Pays?
| Expense | Liability Insurance | Student Travel Insurance | You (Pocket) |
| Retreat Fee | No | Yes (Trip Cancel) | Yes (Refund) |
| Airfare | No | Yes | NO |
| Medical | Yes (If negligent) | Yes | No |
Step-by-Step Action Plan
- Contract: “Organizer is not responsible for airfare or travel costs.”
- Mandate Insurance: “Proof of Travel Insurance required 30 days prior.”
- Separate Funds: Keep retreat deposits in a separate account (Escrow) so you can refund.
- Force Majeure: Ensure it covers weather/pandemics/political unrest.
FAQ
Can I keep the deposit?
Depends on your contract. “Non-refundable” usually holds up if clearly stated.
Am I a travel agent?
See “Retreats” article. Avoid booking flights for them.
Does my credit card cover it?
Maybe, if you are the merchant. Watch out for chargebacks.