Tommy Lloyd
Author: Tommy Lloyd, Managing Director

Tommy has over 15 years experience within the insurance industry, and his primary focus is helping travellers find the right cover for their medical conditions.

Originally posted: 26th Feb 2020

What is “end supplier failure” in travel insurance?

In relation to travel insurance, end supplier failure is something that some policies might include as part of their cover.

Essentially, an ‘end supplier’ could refer to a number of different parties. Whether that’s an airline, hotel or car hire company. Should one of these parties cease trading after you’ve paid for their services, you may be able make a claim based on end supplier failure.

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Do I need to have end supplier failure included in my insurance policy?

It’s not essential, but it’s a good thing to have. 

All types of companies can fall on hard times, be it large airlines or small independent tour operators.

To give you an example, in 2019 alone - 23 global airlines went bust, making it the worst year on record for aviation bankruptcies.  

However, whether or not you decide to get financial failure cover depends on the type of holiday you have booked, who you’ve booked it with and the spread of different end suppliers you’ll be counting on over the course of your trip.

Will my travel insurance policy cover financial failure as standard?

The majority of travel insurance policies will not include end supplier failure coverage as standard, so you will need to keep an eye out for it when shopping around, if that's something you're after.

Depending on what you need, you can find policies with “Scheduled Airline Failure” to exclusively cover airline failure, or “End Supplier Failure” - which can cover you for a multitude of things (but, more on that below).

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Am I covered for financial failure if I’ve booked a package holiday?

If you’ve booked a package holiday with a number of different services included, there is more risk of failure when more companies are attached to the package.

As with most cases in this scenario, you might find that you’re already protected by the Civil Aviation Authority (CAA) or Association of British Travel Agents (ABTA)

This is because the CAA instructs all travel companies that sell flights and accommodation to hold an Air Travel Organisers’ License (ATOL), which we’ll explain more of in a minute.

With this in mind, be sure to double-check these things are in place before you book your package holiday.

Am I covered for financial failure if I’ve booked through a tour operator?

Similarly, if you book your holiday through a tour operator - more often than not, the responsibility falls on their shoulders in the event of failure. 

For instance, if the tour operator has purchased and booked flights on your behalf, they are obliged to make alternative arrangements or offer you a full refund should the airline in question cease trading. 

Again, this falls in line with the CAA regulations explained above.

Am I covered for financial failure if I’ve booked my flights and accommodation separately?

In these circumstances, CAA regulation, unfortunately, won’t apply.

If you have a travel insurance policy that covers you for scheduled airline failure, or end supplier failure you should be able to claim in the event that your airline goes bust.

In some instances, you may be able to recoup the money before you even make a claim to your travel insurance provider.

If you’ve bought the flights on credit card, debit card, or PayPal - it’s likely that you’ll be able to claim the funds back directly if you contact your card provider or bank.

Are you ATOL/ABTA protected?
I booked a package holiday Probably
I booked through a tour operator Probably
I booked my flights and accommodation separately Probably not

What is ATOL protection?

As we’ve mentioned, ATOL stands for Air Travel Organisers’ License, which is a financial protection scheme covering most air package holidays and some flight-only bookings.

If you book your holiday with an ATOL-protected provider then you will be covered if that company ceases trading post-purchase.

You will also be entitled to a refund for the money you paid for the holiday and if you’ve already arrived at your destination as the company enters administration, you’ll still be covered for your journey home and won’t be left stranded.

Ensuring you’re covered

Nowadays, it’s probably fair to say that most people go down the route of booking flights and accommodation separately online, as opposed to buying a package from a travel company or booking through a tour operator. 

For that reason, it’s always worth considering financial failure inclusion for travel insurance - but which type do you need?

Travel insurance policies with “end supplier failure” included

If a policy includes end supplier failure, then this will protect you in the event of travel and accommodation losses should the respective companies go into administration. 

Should this be the case in either scenario, you will be able to claim back the cost of purchasing alternative flights, or accommodation.

Travel insurance policies with “scheduled airline failure” included

Scheduled airline failure exclusively covers the costs if your chosen airline goes into administration. 

However, if you find a policy that includes scheduled airline failure - be sure to carefully check the policy wording, as this may not extend to all airlines, only some. 

With us, you can compare cover across a range of leading travel insurance providers to find a suitable policy. This means you can directly compare what different providers are offering quickly and easily - all in one place. 

Not only can you compare specialist cover for pre-existing medical conditions, but you can also compare what each provider can offer on a policy by policy basis.

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