What is end supplier failure cover?

It is an optional part of some travel insurance policies. It pays back money you lose when a travel company you booked with goes bust before or during your trip. Think of an airline, hotel, ferry line or car hire firm that stops trading after you have paid. Standard policies typically do not cover this, according to the Foreign, Commonwealth & Development Office (FCDO travel insurance guidance, updated August 2024).

It matters most when you book each part of a trip separately, outside the schemes that protect most package holidays.

What does end supplier failure cover pay for?

It refunds money you paid in advance to a travel provider that then fails financially, if you cannot get it back another way. Only the supplier types listed in the policy count.

One wording quoted by the Financial Ombudsman paid up to £3,000 per person for “irrecoverable sums” (decision DRN-3516178). Its list ran from scheduled airlines and hotels to car ferries, villas, car hire, campsites and excursions. Limits and lists vary between insurers.

Is it the same as scheduled airline failure insurance?

Not quite. Scheduled airline failure insurance (SAFI) focuses on airlines, while supplier failure cover usually adds hotels, ferries, car hire and similar firms. Insurers use the names loosely, so read the supplier list rather than the label.

Does standard travel insurance cover a travel company going bust?

Usually not. The FCDO tells travellers to check whether a policy covers an airline or travel agent going out of business, adding that “typically this is not covered” (GOV.UK).

Delay sections rarely fill the gap. When one couple’s airline became insolvent mid-trip, their insurer paid £196.28 for extra costs under the travel inconvenience section, but nothing for unused bookings. The ombudsman agreed, noting that under that policy an airline going bust was not an insured event (decision DRN-5305687).

Our holiday cancellation cover page explains what the cancellation section normally pays for.

Which bookings are already protected if a company collapses?

A package holiday that includes a flight is normally covered by ATOL, the Civil Aviation Authority scheme for air holidays. The CAA says ATOL “is not travel insurance”. A flight bought direct, where you get a valid e-ticket, is not ATOL protected (Civil Aviation Authority).

UK package organisers must also have security in place in case they become insolvent. It refunds you, and brings you home if transport is included (Package Travel Regulations 2018, regulation 19). The Financial Ombudsman also points travellers to ABTA as a possible route for recovering costs (Financial Ombudsman Service).

You may be able to use more than one of these routes.

Route	What it can help with	Main limits
ATOL	Package trips with a flight, and flight bookings that come with an ATOL Certificate	Not for flights bought direct with an e-ticket. Claim within 12 months of the failure.
Package organiser protection	Refunds, and getting home, when a package organiser becomes insolvent	Packages only, not separate bookings.
Section 75 (credit card)	Claims against the card provider when the supplier breaches the contract	Single items over £100 and up to £30,000.
Chargeback (debit or credit card)	Asking your bank to claw back a card payment for a service never provided	Card scheme rules and time limits apply. Banks do not have to raise one.
Supplier failure cover	Money you cannot get back by any other route, from suppliers named in the policy	Often excludes packages. Only listed suppliers count.

Sources: CAA, Package Travel Regulations 2018, Consumer Credit Act 1974, section 75, Financial Ombudsman Service on chargeback, DRN-3516178.

Do you need supplier failure cover for a package holiday?

Often you will get little extra from it, because many wordings leave packages out. In the decision above, the cover applied only to arrangements “not forming part of an inclusive holiday”. A couple whose cruise company went into administration were refused, because the cruise counted as a package and cruise ships were not on the list. The ombudsman sided with the insurer (DRN-3516178).

The cover is aimed at trips you build yourself, with each part paid to a different company.

How would a claim work on a trip you booked yourself?

You would usually try every other route first, then claim for whatever is left. The Financial Ombudsman says most travel policies do not cover losses you can recover from someone else (Financial Ombudsman Service).

Worked example: Rhys and Megan’s trip to Portugal

Rhys and Megan from Cardiff book flights direct on a credit card. They pay a villa deposit by debit card and book car hire separately. Weeks before they fly, the airline stops trading. They hold e-tickets, so ATOL does not apply.

The flights cost more than £100, so they start a section 75 claim with the card provider. They ask the villa owner and car hire firm about refunds or new dates. Only then do they turn to their policy. Whether it pays for the villa and car, which did not fail, depends on the wording.

Steps to take if a travel company goes bust

1. Check for an ATOL Certificate. If you have one, follow the CAA’s instructions for that failure.
2. Contact your card provider about section 75 or a chargeback. Do it quickly, because chargeback rules carry time limits.
3. Ask the other suppliers on your trip whether they can refund, rebook or change dates.
4. Get any refusal in writing. In one complaint, the insurer wanted evidence the costs could not be recovered elsewhere (DRN-4674721).
5. Claim on your policy for the amount still unrecovered, with receipts and booking confirmations.

If the collapse happens while you are away, the CAA says it can help ATOL-protected travellers stay in their accommodation or get home (CAA).

What to check before you buy supplier failure cover

Look for these points in the policy wording or the summary document. If any are unclear, ask the insurer before you buy:

• Which supplier types are named. Check for airlines, hotels, ferries, cruise lines, car hire and excursions.
• Whether packages and inclusive holidays are excluded.
• The limit per person, and whether it covers the whole cost of your trip.
• Whether it pays only for the failed supplier, or also for other bookings you can no longer use.
• Whether it helps you get home if the failure happens mid-trip.
• The excess, and when the cover starts. Buying as soon as you book gives you the longest window.

Travelling several times a year? Check whether annual multi-trip travel insurance includes it on every trip. Hiring a car abroad brings a separate risk, which car hire excess insurance covers. For worries about events at your destination, see our guide on cancelling a holiday over safety fears.

Questions people ask about supplier failure cover

Does travel insurance cover an airline going bust?

Most standard policies do not. The FCDO says cover for an airline or travel agent going out of business is typically not included, so look for supplier or airline failure cover.

Is end supplier failure cover worth it for flights booked direct?

It can be, because flights bought direct with an e-ticket are not ATOL protected. Card protection may help, and supplier failure cover can pick up losses a card claim leaves behind.

Does supplier failure cover include package holidays?

Often not. Many wordings exclude inclusive holidays, because packages already have ATOL or organiser protection. In one ombudsman decision, the insurer was found to have fairly refused a cruise claim on this basis.

What to do next

Work out how your trip is booked first. For a package with flights, check for ATOL protection. For a trip you build yourself, look for a policy that names supplier failure, with a limit that matches what you have paid.

Find out more on our travel insurance page, or compare travel insurance quotes with Tiger.co.uk. Then check each policy’s wording for supplier failure cover before you buy. Tiger.co.uk compares quotes and is not an insurer.