Do I need supplier failure or airline failure insurance?

Key takeaways

• Supplier failure and scheduled airline failure might be included in your travel insurance - but you can buy them as standalone products too

• Supplier failure insurance offers cover if one of the parties supplying your holiday - such as a hotel, airline, or car hire company - goes out of business

• Package holidays are usually ATOL-protected

Is my holiday financially protected?

One of the biggest concerns when booking a holiday is whether your hard-earned money is safe. Financial protection can vary greatly depending on how you book your trip. Not all types of protection will cover you for the financial failure or insolvency of the businesses involved in your trip. These might include airlines, hotels and car hire companies.

What consumer protection does my package holiday have?

Package holidays normally have ATOL protection. ATOL stands for Air Travel Organiser's Licence. The ATOL scheme is a UK financial protection scheme that safeguards your money if you've booked a package holiday. If your travel provider goes bust while you're on holiday, ATOL is there to ensure you don't lose the money you paid and that you're not left stranded abroad.

📣 Did you know? You can check whether a travel agent or tour company is an ATOL member by visiting the Civil Aviation Authority (CAA) website.

Will I be protected if I make my own travel arrangements?

If you are booking flights and accommodation separately, you won’t usually be covered by ATOL. The main exception to this is if you buy the separate elements of your trip in the same website visit. For example, you might buy flights and a hotel on Booking.com.

How can I get comprehensive travel insurance cover?

Whether your holiday is ATOL-protected or not, it’s still a good idea to have travel insurance.

As well as offering peace of mind that you are covered for various factors that may go wrong, travel insurance will also include cover for medical expenses, curtailment, cancellation and your possessions. You can compare travel insurance policies with MoneySuperMarket.

Most travel insurance policies are designed to cover "specified risks" rather than "all risks," which can leave gaps in your cover. More comprehensive policies tend to cover a wider range of issues, including Scheduled Airline Failure Insurance (SAFI) and End Supplier Failure Insurance.

What is scheduled airline failure insurance (SAFI)?

SAFI is designed to protect you against the costs that arise if your airline goes bust while you are on holiday. In short, it will make sure you get another flight home from your trip.

Some mainstream insurers such as Sainsbury's Bank and and RAC offer SAFI, and you can compare these options on MoneySuperMarket .

What is end supplier failure?

End supplier failure occurs when a travel service provider, such as an airline, hotel, or car rental company, becomes insolvent or ceases trading, leaving customers with unused, pre-paid services.

📣 Did you know? If you don’t have cover for the failure of these firms, you may incur a financial loss.

Some comprehensive travel insurance policies include end supplier failure cover. This type of cover can provide alternative arrangements for travel and accommodation if necessary, and may cover other travel components too such a car hire, coach operators and pre-booked excursions.

Will my travel insurance cover financial failure?

Check your travel insurance to see if it covers financial failure.

If your existing travel insurance policy doesn't include supplier failure or SAFI, you can buy standalone cover using MoneySuperMarket.

When it's time to renew your travel insurance, you might want to look for a comprehensive policy that includes supplier failure.

How can I protect myself when booking a holiday?

• Check the reliability of the booking company.

• Verify that the operator or agent is ATOL-bonded and look for membership of organisations such as ABTA, TTA, or the Global Travel Group.

• If you are using a Visa or MasterCard debit card, you may be able to use ‘chargeback’ if something goes wrong.

• Use a credit card for transactions of more than £100 to benefit from protection under section 75 of the Consumer Credit Act. This makes credit card providers jointly liable for refunds if services are not delivered or a firm goes bust.

• Never pay for components of your holiday by bank transfer.

How can I find cheaper comprehensive travel insurance?

To ensure you're fully covered for your next trip, compare travel insurance policies that include both SAFI and end supplier failure protection.

These types of cover can be included in both single trip and annual multi-trip travel insurance policies.

You can read more about ATOL, and check ATOL membership at the CAA website.

If you book a package holiday, check the tour operator or travel agent is bonded with ATOL. You can do this on the CAA website. Also check your travel agent is a member of the Association of British Travel Agents (ABTA), Travel Trust Association (TTA), or Global Travel Group. These organisations ensure that money paid to their retailer members is covered.