The main supplier of consumer financial protection insurance to travel companies has sought to reassure the trade after tour operator association Aito announced it would suspend its promise of 100% protection.
International Passenger Protection (IPP) 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.”
His intervention came after Aito warned it was suspending its protection promise from August 1 while it seeks guarantees that insurers will honour policies.
Aito acted after insurance company AmTrust Europe, formerly IGI Insurance, cancelled the cover of former Aito member Skiing Europe – a school ski-trip specialist – arguing there had been a “material non-disclosure” in the company’s insurance application.
Aito member Noel Josephides, an Abta board member and managing director of tour operator Sunvil, said AmTrust Europe’s decision put a question mark over all consumer protection and supplier failure insurance policies in the travel sector.
IPP declined to comment on the detail of the AmTrust case, but Mclean said: “Section 19 of the Package Travel Regulations [PTRs] makes clear a passenger cannot be penalised by the actions of a tour operator.”
However, Aito said it had received legal advice that “AmTrust Europe was not prevented from [cancelling Skiing Europe’s protection policy] by Regulation 19 of the PTRs”.
The regulation states: “The insurer agrees to indemnify consumers . . . against the loss of money paid over by them.” It also states that an appropriate policy “means one which does not contain a condition which provides that no liability shall arise under the policy, or that liability shall cease . . . in the event of some specified thing being done or omitted to be done”.
Josephides said: “We have accepted a way of offering consumer financial protection that just does not work. This is something the Department for Business has to be aware of – that the Civil Aviation Authority has to be aware of.
“The problem is the insured person is not the tour operator. Should a policy holder give wrong information, the insurer can withdraw, but the customer has no idea. It took us completely by surprise.”
This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.