Tourism insurance, which refers to a type of insurance that covers the costs and loses associatedrnwith traveling. It is usefull protection for those travelling domestically or abroad. It plays anrnimportant role in tourism development in many countries. Nonetheless, its practice andrncontribution to tourism development in Ethiopia is hardly researched. Hence, it is imperative tornexamine this overlooked theme in an Ethiopian context. The purpose of this study is torninvestigate the current practices, contribution and challenges for the wider application ofrntourism insurance in Ethiopia. This study is a survey type and was carried out by analyzingrnqualitatively the collected data from insurance companies managers, tourists and tourismrnsuppliers such as tour operators and, travel agency managers found in Addis Ababa. Thernresearch participants were selected using a purposive sampling method. A total of 14rnrespondants in-depth interviews were conducted with respondents from insurance companies asrnwell as travel agencies. The results of the study show that the most important factors affectingrnthe role of tourism insurance in tourism development are the insufficient development of tourismrnresources in the area, lack of financial resources, poor general infrastructure and lack ofrnawareness. The current practices of tourism insurance and its contribution for tourismrndevelopment in Ethiopia are also revealed in this study. It is concluded that the practice ofrntourism insurance is currently low. Hence, it is recommended that tourism insurance operatingrnin the tourism sector should be encouraged to provide sufficient insurance packages to tourismrnservice providers as well as tourists, both domestic and internationals. The study also paves thernway for future interested researchers to conduct a thorough on the role of tourism insurance inrnthe development of tourism by applying rigorous quantitative techniques.