The Package Travel Regulations Insurance

The Package Travel Regulations 1992 imposed various responsibilities on all providers of inclusive package holiday as defined.  One of the most onerous is the need to provide security for clients’ payments prior to and up to the completion of the package holiday in the event of the financial failure of the organiser.

Where a trade organisation bond, such as ABTA or AITO, is not required, Package Travel Regulations Insurance may be provided, subject to the provision of a satisfactory proposal form and the last three years’ trading accounts, or a satisfactory business proposal, in the case of a start-up organisation.  A sum insured will be determined based on the information provided on the proposal form.

A quotation will be provided as a premium per passenger.  A 25% minimum and deposit premium will be required to activate the cover, with declarations (monthly or quarterly as arranged) thereafter, and additional premiums payable once the deposit premium has been exhausted. The deposit premium will depend on the type of organisation and their financial position.

Package Travel Regulations Insurance – Main Exclusions:

• The failure of a scheduled airline
• Any arrangements not booked in the UK
• The failure of the travel agent or any booking agent or consolidator with whom any travel, accommodation or pre-arranged and paid attractions have been booked
• Any provider that is in Chapter 11, bankruptcy or receivership at the time of booking

One of the benefits of this Package Travel Regulations Insurance is that only a deposit premium need be paid at the start, additional premiums being payable as and when passenger numbers increase.