What is ATOL protection?

Key takeaways

• ATOL protects UK holidaymakers and it’s a legal requirement for all UK companies selling package holidays

• If you’re yet to go on holiday and your travel company goes bust, ATOL should help you to claim back any money you’ve spent

• For anyone on holiday when a company fails, you should be able to continue your trip as planned

• If you aren’t on a package holiday, you won’t have ATOL protection, which means having travel insurance is even more important to protect your trip

• European travel agencies are not legally required to provide ATOL protection services - make sure to check what protection schemes they offer

When planning a holiday, the last thing anyone wants to think about is their travel company going under. But it's an unfortunate reality that can turn dream holidays into nightmares. In the UK, there's a safeguard in place for such scenarios: the Air Travel Organiser’s Licence (ATOL).

By law, all UK companies selling package holidays must hold an ATOL, contributing to a fund that provides financial protection for holidaymakers if the company ceases operations, whether before or during their trip.

What is ATOL?

ATOL, managed by the Civil Aviation Authority (CAA), is a financial protection scheme for UK travellers. It is also a legal requirement for all UK companies selling package holidays.

It's important to note that ATOL doesn't extend to overseas companies, so it's a unique benefit for those booking within the UK. ATOL covers holidays that:

Include flights booked with accommodation and/or car hire, and sometimes flight-only deals, though there are exceptions.

It's not a blanket coverage for all travel bookings though, as it does not cover Linked Travel Arrangements (LTAs) or flights purchased directly from airlines.

What does 'ATOL protected' mean?

ATOL operates by charging travel companies a fee of £2.50 per traveller, which goes into a fund managed by the Air Travel Trust.

This fund is used to refund holidaymakers or, if necessary, repatriate them if their holiday provider fails. ATOL protection is a free service for travellers, and it offers significant benefits, including:

• Ensuring you can complete your holiday and return home if your provider fails during your trip.

• Providing a full refund if the company collapses before your holiday starts.

What is ABTA protection?

The Association of British Travel Agents (ABTA) offers similar protection to ATOL. It has a voluntary scheme which covers some package holidays.

Holidays which include one or more of the following elements - hotels, car travel, trains or cruises – are covered. It doesn’t provide cover for package holidays where flights are included, which is where ATOL can help.

Do I need travel insurance if my holiday is ATOL or ABTA protected?

Despite the reassurance of ATOL or ABTA protection, it's still recommended to purchase travel insurance.

This is because travel insurance will cover you in case you need medical treatment while you are away, you have to cancel your plans, or your trip is affected by delays or lost luggage.

Specialised travel insurance policies, such as winter sports cover or water sports cover, can even offer special protection for things like equipment or reimburse you if your planned activities are cancelled.

Is my holiday ATOL protected?

Most package holidays are covered by ATOL but to check:

What if I book a holiday with a company that’s not ATOL protected?

Booking a package holiday with a travel company that doesn't offer ATOL protection is a risk, as all UK-based businesses selling package holidays are required to provide it. It's a red flag if a company doesn't have this essential protection.

Do I need an ATOL certificate?

Yes, your ATOL certificate is crucial. It serves as proof of protection and provides guidance on what to do if your holiday provider fails.

You should receive this certificate immediately upon booking. In the rare instance you don't receive one, ATOL will consider claims without a certificate on a case-by-case basis, but it's best to confirm you will get a certificate before booking.

How can I make a claim under ATOL protection?

If you need to make a claim under ATOL protection, follow the instructions on your ATOL certificate, submit a claim form, and expect it to be processed within 28 working days.

For those stranded abroad during a provider failure, consult the Civil Aviation Authority's website and complete an ATOL claim form with evidence of your booking and any additional costs incurred.

If you’re already on holiday when your provider goes bust, you can check the CAA's latest ATOL holders failures for more information about what to do.

You will then need to complete an ATOL claim form, providing evidence of your booking and any extra costs incurred.

Do all European travel agencies offer ATOL protection?

European travel agencies are not legally bound to the ATOL scheme. It's important to check what protection schemes they offer and how they apply to UK customers.

How else can I protect my holiday?

ATOL and ABTA protection isn’t the only cover you can use for your holiday.

Travel insurance is the best form of protection as it covers a variety of things, including the cost of medical treatment.

You’ll also be covered if you lose your belongings, or their stolen, or if you need to cancel because of an unexpected health condition.

If you book your holiday using a credit card, you can also claim your money back under Section 75 of the Consumer Credit Act 1974 should the provider go bust.

Looking for travel insurance?

It's advisable to purchase travel insurance immediately after booking your holiday so you are covered if something happens – such as your travel company going bust – before you go.

You can compare travel insurance policies quickly and easily with MoneySuperMarket, ensuring you find the best fit for your needs.