19 travel firms have become insolvent this year: Is your holiday safe?

By , October 21, 2011 2:28 pm
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If you haven’t booked a traditional package holiday, travel insurance with insolvency cover can provide the extra protection you need if your travel suppliers becomes insolvent.

The level of financial protection you have for your holiday if a supplier becomes insolvent depends largely on how you booked it, which in turn means that how you booked your holiday will also have an impact on what level of travel insurance cover you should buy.

See our quick check diagram to see if your holiday is financially protected or if you need travel insurance with insolvency cover

Last week saw the collapse of the 19th tour operator this year, with Twickenham based Geo-Dive going into administration. The travel industry is going through a tough time at the moment as holiday makers tighten their belts in the face of rising inflation and there are fears of further failures in the coming months.

According to corporate administrator Begbies Traynor, there are a growing proportion of UK travel companies in serious financial distress. The company’s ‘Red Flag Alert’ report for Q3 2011 warns that the number of travel and tourism businesses facing ‘critical distress’ has risen 49% in the past year, and that insolvencies are “inevitable”.

In the light of this news, it’s important to know what protection you have for your holiday in the event that one of travel suppliers cease trading, either before you travel or whilst you are away.

Under the current ATOL (air travel operator’s license) regulations, your holiday is only financially protected by law if it is bought as a traditional package.

If you book elements of your holiday separately, direct with different suppliers, they will not be protected under the ATOL scheme.

Travel insurance with insolvency cover can provide the extra financial protection you need if you book your holiday independently. This type of insolvency cover is often called Scheduled Airline Failure or Dynamic Packaging Cover – Some companies will include it in their standard travel insurance policy, and some travel insurance
providers have it available as an optional extra.

Check out our easy diagram to see whether your holiday is protected or you should consider buying travel insurance with insolvency cover.

Is your holiday protected: Do you need travel insurance with insolvency cover?

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