Your guide to end-supplier failure travel insurance

17/06/2024

Many holidaymakers don’t realise that they may be leaving themselves open to serious financial loss just by the way they book their holidays. In recent years there has been an increase in the number of airlines and travel companies going bust in the wake of financial difficulties following COVID-19 – this is called end supplier failure. It is important to know your legal rights and the financial protection schemes available to you before you travel. Different travel options can offer you varying degrees of protection so knowing what to choose is key. In this guide we will explain what financial protections are available and what your travel insurance will cover.

Compare Travel Insurance

We search over 35 travel insurance providers to save you hassle and money

Get Quotes Today

What is end supplier failure?

End supplier failure is essentially what happens when an airline, travel organiser or any other company you’ve paid for travel services suffers financial failure and goes bust. This means they are no longer able to offer you the services that you have paid for and you will need to look at how you can recover these costs. Some comprehensive travel insurance policies will cover you against the financial failure of these services – which is why checking your policy details before you travel is key.

Am I covered against airline and travel company failure?

The level of financial protection available to you can be heavily reliant on how you book your trip and your individual travel policy. Packaged holidays often bundle airfares, accommodation, travel and tour fees into one package which can offer you greater financial protection against supplier failure than if you manage your holiday yourself. This means you may be leaving yourself at risk by individually booking flights, accommodation and travel by yourself and not through an accredited travel agent. Since the collapse of airlines and travel organisations can cause serious issues for those travelling, certain schemes such as ATOL are in place to protect consumers. You can check if your travel provider has an ATOL certificate here at the CAA ATOL checker. To confirm if your travel insurance covers you against insolvency and failure of a travel supplier – look for sections outlining flight cancellation and end supplier failure in the policy information document.

What is ATOL?

ATOL (Air Travel Organisers’ Licence) is a UK financial protection scheme that is managed by the Civil Aviation Authority (CAA). It is meant to safeguard those who have purchased packaged holidays and flights from certain UK-based companies in case they go bust. Every UK based travel/holiday company which sells flights as part of their travel packages are legally required to hold an ATOL licence. You can check whether your travel organiser is a member of the ATOL scheme by visiting the Civil Aviation Authority (CAA) website. Travel insurance providers may also offer their own financial protection schemes independent of ATOL in the event of business failure, so be sure to check directly with your travel provider.

What does end supplier failure mean on travel insurance?

When booking your holiday you can expect that airlines, hotels and travel services will provide you with the services you’ve paid for. However if one of these providers goes out of business while you travel, you may find your holiday plans seriously impacted. Not only may you be left out of pocket, you may also be left stranded during your travels. Some insurers offer end-supplier failure travel insurance so you can get covered against the following.

Unused travel tickets

If you have pre-booked travel tickets, accommodation or tour and travel services, these can be covered under an end supplier failure insurance policy.

Incurred expenses

If you are forced to make alternative arrangements for travel and accommodation due to the failure of one of your service providers, you can claim these costs.

Return costs

If you are unable to continue your holiday due to end supplier failure, you can recover some of the return costs with end supplier failure travel insurance.

What does scheduled airline failure mean?

Scheduled airline failure is when an airline stops running scheduled flights due to bankruptcy or financial difficulties. Scheduled airline failure insurance (SAFI) is similar to end supplier failure insurance but instead just covers you for airline failure. This means if the airline you’re booked with goes bust then you will be covered for the associated costs. Some insurers will not offer SAFI for certain airlines so be sure to check the policy details. Many standard travel insurance policies will also not cover scheduled airline failure – check for more comprehensive policies which may include SAFI in their coverage.

Do I need end supplier failure insurance?

If you’ve booked your holiday through a travel organiser as part of a package, you will be covered by ATOL if your organiser has included flights as part of your holiday package. They will also likely have additional financial protections in place for disruptions to pre-booked accommodation and travel. When you book different parts of your holiday separately then you will not likely be covered by the ATOL protection scheme. By taking out end supplier failure insurance you can protect yourself against the financial failure of these services. Examples of services that can be covered include:

Airlines

Car hire companies

Hotels

Tour operators

Coach and railway tickets

Car ferries

What happens if I don’t have supplier failure cover on my policy?

If your current travel insurance policy doesn’t have end supplier failure cover or SAFI then you can look to purchase a standalone policy in addition to your current insurance. If you haven’t yet taken out a policy then Quotezone can help you compare travel insurance to find the right cover for you. Check comprehensive insurance policies for their coverage and see if end supplier failure cover is available.

How to get scheduled airline failure insurance

Travel insurance is key to protecting your holiday against unexpected mishaps, but it may not cover you against airline bankruptcy and insolvency. There are comprehensive travel insurance policies out there however which can cover you against scheduled airline failure and end supplier failure. Be sure to check individual policy documents.

How to claim on SAFI

Confirm your claim is valid
Check if you are covered through ATOL
Make a SAFI claim through your insurer
Provide proof of purchase
Follow your insurers claims process

When making a SAFI claim, you’ll need to provide your insurer with relevant receipts or invoices for the flight costs that you want to claim. If you’ve paid for flights through your credit card, you should be covered under section 75 of the Consumer Credit Act if the cost of your flights was more than £100. This means you can claim your money back through your credit card provider. A visa chargeback scheme may also be available to you if you’ve purchased through your debit card.

Getting the right comprehensive cover for your next holiday

Taking out the right travel insurance policy is key to ensuring you’re properly covered for your next holiday. This means checking for policies which cover you against additional risks such as scheduled airline failure and end supplier insolvency. Whilst not the most common form of travel disruption, unfortunately it is the case that some travel providers and airlines do go bust. To ensure that you aren’t in trouble should this happen, look for comprehensive travel cover that offers SAFI and end supplier failure insurance. If you are booking a holiday package through a travel agent – check that they are a member of the following organisations. Members can offer greater financial protection against rail, coach, or ferry provider failure.

Association of British Travel Agents (ABTA)

How many tourists visit Paris Each Year

Paris has historically been referred to as the city and lights and has been an object of cultural fascination for…

Read full guide

View All Guides