Lawyers for tour operators’ association Aito have written to insurers requesting written commitments to honour consumer-protection policies.
The letter follows Aito’s announcement that it will withdraw a 100% financial-protection guarantee from Monday after insurance company AmTrust Europe, cancelled the cover of former member Skiing Europe because of a “material non-disclosure” in the company’s insurance application.
Aito’s request came as travel industry insurance specialist Towergate Chapman Stevens issued a statement seeking to reassure the trade.
TCS managing director Tony Gilpin said: “TCS has never declined a Financial Failure Insurance claim in the 18 years we have been involved in the sector.”
There were further assurances from International Passenger Protection (IPP), the main supplier of consumer financial protection insurance to travel companies. Director Paul Mclean said: “IPP has been providing insurance to the travel industry for the last 21 years and never refused a valid claim due to the insolvency of a tour operator.”
The AmTrust cancellation left schools and parents out of pocket for unfulfilled bookings of school ski trips arranged by Skiing Europe. The Devon-based company is the subject of investigations by the police and Trading Standards.
Aito wants written assurance from insurers that if they have accepted an insurance application and premiums have been paid they will pay out to consumers in the event of a company failing.
Leading Aito member Noel Josephides said: “We have had verbal assurances from insurers, but we want it in writing. We want insurers to say their cover will work the same way as a bond. At the moment it does not.
“If a bond is lodged with Abta or the CAA, they have authority to call it in whether or not a company has gone into liquidation. With insurance, it seems the insurer is the body to take that decision, not a government-approved body.”
The Aito letter has gone out to insurers Travel & General, IPP and HCC Insurance. The 150-strong association has 23 members who provide financial protection through insurance.
Insurer TCS said it was available to answer tour operators’ questions.