What to do if your travel company goes bust

Posted on August 2, 2019 by Kelly Edwards
woman looking at departure boards in airport

In 2019, a number of holiday companies and airlines have gone bust including Flybmi, Super Break and Late Rooms.

Hearing about trusted companies filing for administration and going bust can feel shocking.

But there are regulations that can help you to claim compensation if you find that a supplier you’ve chosen goes bust.

Your rights when it comes to claiming your holiday if you paid with a credit card

Under section 75 of the Consumer Credit Act of 1974 f you buy anything on your credit card, including flights, section 75 gives you legal protection if things go wrong.
That is, as long as the amount bought on your credit card was between £100 and £30,000.

Section 75 includes the right to claim compensation from your credit card company when companies you have bought services from go bust.

Even if you only paid a small deposit on your card and the rest of the payment via a different means, you would still be protected under section 75 of the Consumer Credit Act to make a claim.

To claim against your travel company going bust if you bought the tickets on your credit card, contact your credit card company directly.

How to check if your travel insurance covers for the collapse of travel companies

Not all travel insurance policies will cover you for the collapse of travel companies as standard so it’s worth checking the level of cover you have chosen.

If you have a Staysure travel insurance policy then the collapse of airlines is covered under our End Supplier Failure section which is included as standard in our Comprehensive Travel Insurance policies.

As part of the End Supplier Failure cover we provide, everybody who is named under the policy should be covered to claim up to £3,000 compensation.

If you booked your travel or holiday along with somebody who is not covered by a Staysure Comprehensive Travel Insurance policy, then you would not be able to claim for their share of compensation under your policy – even if you booked the holiday or flights.

To claim against the collapse of companies on your travel insurance policy, you will only be eligible to claim if you cannot claim compensation by any other means.

How to cover yourself for future collapse of travel companies

If you’re worried about travel companies collapsing, then it’s really important to make sure that you’ll be covered for the financial failure of a business you’re buying services from.

You can sometimes be legally covered for compensation depending on how you’ve bought your holiday. For example, choosing an ATOL protected holiday package will mean that you have protection for the collapse of your holiday provider.

Also, if you’ve bought your holiday or services on your credit card, then you’ll be covered under section 75 of the Consumer Credit Act to claim for compensation through your bank.

If you aren’t covered for end supplier failure by the methods above or by any other policies, then having a travel insurance policy that can cover financial failure may be a good idea.

Having End Supplier Failure included as standard in a Staysure Comprehensive policy doesn’t just cover airlines and travel companies. It also allows you to claim for compensation for the financial failure of any of the following:

  • Scheduled airline
  • Hotel
  • Train operators
  • Car ferries
  • Villas abroad or cottages in the UK
  • Coach operators
  • Car or camper hire companies
  • Caravan sites
  • Campsites
  • Mobile home
  • Safaris
  • Excursions
  • Eurotunnel
  • Theme parks or attractions

It’s also worth checking your policy wording to make sure that you’re covered for the eventualities that are important to you – checking what can and cannot be covered in the event of a claim as this will vary.

If you’re also worried about whether you’ll be covered for Brexit with your travel insurance, then it’s worth checking with your provider to find out how they can cover you for specific eventualities.