Supplier failure holiday protection

Booking your holiday independently can give you more choice and flexibility than a traditional package holiday. You pick where to go, stay, and how to travel. It can also be easier if you’re booking several different types of accommodation or places to visit.

But if the airline, hotel or rental car company you’ve booked with goes bust, you might not be protected. Here’s why you may want to make sure End Supplier Failure is included in your travel insurance policy.

Written by

Rebecca Goodman

Last Updated

11 MAY 2022

5 min read

What is End Supplier Failure?

End Supplier Failure is an insurance term that refers to the possibility of your tour operator, airline or hotel going out of business. If you have supplier failure cover, it would give you protection if one of these companies went out of business.

The travel and hospitality industries have suffered financially as a result of coronavirus, so this scenario became more of an issue than it might once have been.

Why would I need supplier failure cover?

If you book your flights, accommodation and car hire separately, you may not have the same financial protection you would with a package holiday.

Package holidays booked through a tour operator or travel agent should be covered by Air Travel Organisers’ Licensing (ATOL) or Association of British Travel Agents (ABTA) schemes. This means you won’t be stranded abroad, and you should get your money back if the airline or supplier goes bust.

However, independent travellers who book different elements of their trip separately, are unlikely to be protected by ATOL or ABTA. Or it’s possible only specific parts of the trip are protected.

Supplier failure cover can provide financial protection for a holiday cancellation, if something has gone wrong with the ‘end supplier’ – for example, the hotel. In this scenario, you’d receive a pay-out if the hotel operator went out of business either before or during your trip.

Some policies include some cover for End Supplier Failure as standard. Others will allow you to buy supplier failure holiday protection as an add-on to your travel insurance policy, or as a standalone policy.

The coronavirus pandemic has increased the need for cover for trips abroad after so many were cancelled because of lockdowns. Even now, things can change at the last minute so it’s even more important than ever to make sure you’re covered if a holiday is cancelled.

Customers with pre-existing medical conditions

If you have a serious health condition, your travel insurance is likely to be more expensive. Whatever happens, don’t lie to an insurance provider, because this could mean any claim you make is rejected. When you declare any medical conditions on our website, we’ll only show you quotes from insurance providers who will cover them, with no exclusions.

If your condition is more serious, MoneyHelper has a directory of insurance providers who may be able to provide quotes over the phone. You can call them on 0800 138 7777.

ATOL protection explained

ATOL protection applies to holidays booked with an ATOL holder. This most commonly applies to travel agents, who book both the flight and accommodation as part of a package holiday. It’s a government-backed scheme, and offers protection for travellers who have booked to travel with an ATOL holder who goes bust. If you’re booking a flight and accommodation separately, you won’t receive ATOL protection.

If the travel agent goes bust before you go on holiday, you’ll receive an alternative booking or a full refund for the cancellation. If they go bust while you’re already away, then the ATOL protection scheme will provide you with support to minimise the disruption to your holiday.

ATOL protection isn’t something you add on to your booking or travel insurance, it’s automatically applied to package holiday bookings made with an ATOL holder.

Does my standard travel insurance include end supplier failure?

Some travel insurance policies will include supplier failure protection as standard, often in their higher-rated products, but many don’t.

Supplier failure protection can offer additional cover for elements of your holiday that were booked separately. Typically, cover ranges from £1,000 to £2,500 per person.

Ask your insurance provider or check the small print to see if it’s included in your policy. While it’s not essential, it can offer peace of mind if a supplier goes bust.

What does End Supplier Failure travel insurance cover?

End supplier failure travel cover can vary depending on insurance providers.

Some policies offer scheduled airline failure insurance (SAFI). This only applies to airline bookings, not other parts of your holiday. It’s important that you read the terms and conditions to understand the specifics of what this will cover you for.
Other policies offer end supplier failure covering other parts of your holiday - accommodation, car hire, rail and coach journeys, for example.

You should also check if any parts of your holiday come under ABTA or ATOL protection.

As with all insurance policies, read the terms and conditions of any extra add-ons carefully, so you know exactly what’s covered.

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

Yes, if you’ve booked a package holiday (flights and accommodation) through a UK travel operator, the law requires them to provide financial protection for their holidays. If your tour operator suffers financial failure, you’ll receive a full refund.

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

If you’ve booked your flights and accommodation separately, this isn’t a package holiday and so will unlikely be ATOL protected. This means, if either of the travel companies suffer from financial failure, you’ll need to rely on a travel insurance policy to receive any compensation.

Your provider could pay out if this does happen, or offer you another trip. Alternatively, the travel operator can pay out - either way, check the small print before you book so you know where you stand if the worst does happen.

Does paying for a holiday with credit or debit card impact my end supplier protection?

Yes, when booking a holiday, you should pay for it with either a Visa or MasterCard debit card, or a credit card. If the holiday costs more than £100, and less than £30,000, then you may receive protection under section 75 of the Consumer Credit Act when booked with a credit card. With a debit card, you should be able to charge back the transaction, if the tour operator goes bust.

Paying with a credit card adds a little extra protection if things go wrong. Just remember to pay off the balance every month, otherwise you could be charged interest.

How can I compare travel insurance deals?

Use our handy comparison tool to compare travel insurance deals in a matter of minutes. Selecting ‘more details’ next to each quote in your comparison results will show you more information about the key features of each deal, so you can quickly see if supplier failure protection is included.

Compare travel insurance with us and see if you can save on your next trip.