Supplier Failure Insurance

In the current economic climate it is vital for travel organisers to protect themselves against the failure of an end supplier, such as airlines, hotels and car hire.

If you are providing packages as defined by the Package Travel Regulations you are liable for the failure of any part of the services you sell. Even if the customer is able to claim on his credit card, the credit card company could well enforce a charge-back to you.

Supplier Failure Insurance provides an annual policy covering the financial failure of any declared and agreed end supplier such as hotels, other accommodation providers, ferries, rail and coach operators, cruise operators, car hire providers and the like.  It can also include scheduled airlines if requested.

For a quotation for Supplier Failure Insurance a simple proposal form is needed, giving brief information about the proposer, and a list of all suppliers to be used, with a note of the anticipated passenger numbers for each.  The sum insured per passenger 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.

Supplier Failure Insurance - Main Exclusions:

• Scheduled Airlines, unless requested and agreed as part of the quotation
• Any arrangements not booked within the United Kingdom
• Any provider that is in Chapter 11, bankruptcy or receivership at the time of booking
• Any failure where there is a bond or other insurance in place for your benefit, except to the extent of any excess over that payable by that bond or insurance

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