Insurance ‘temporarily suspended’ on Thomas Cook flight-only

Insurance ‘temporarily suspended’ on Thomas Cook flight-only

Independent agents have been advised that supplier failure insurance on Thomas Cook flight-only sales from a major provider has been temporarily suspended .

Northern & Western Insurance Company issued the temporary suspension on Thomas Cook flight-only and accommodation-only sales on Tuesday.

Hays Travel, TTA Worldchoice and Advantage have notified their agents about the new stance. However, retailers said they were surprised by the move and were continuing to sell the company’s core package holiday products.

The move follows news that Thomas Cook had postponed publishing its financial results as it seeks £100 million in loans and comes amid fears up to 200 shops could close.

Hays Travel managing director John Hays said the group was supportive of Thomas Cook but had “no choice” but to stop selling flight-only and accommodation-only.

He said: “This did come as a surprise and we have had no alternative but to take these products off sale. If we were to sell products without insurance cover our clients would be vulnerable. If and when we get the insurance cover we will reinstate these products; we want to get them back on sale.”

He added: “We have no problem with Thomas Cook. We are still selling Thomas Cook packages. The last thing we want is for them to go down; it would be bad for the whole industry.”

David Sharp, director of financial services at Advantage, said: “We got an email from the insurers yesterday morning saying they wished to take Thomas Cook off cover from yesterday. Obviously we have to abide by that instruction   – we didn’t have a lot of choice in the matter.

“This is not an unusual action. It shouldn’t stop agents from selling Thomas Cook packages, but it might impact their decision to book flight-only or accommodation-only. We would expect cover to be reinstated once Thomas Cook has secured its second tranche of borrowing and has released its results.”

NWIC’s UK general sales agent Philip Radley told Travel Weekly: “The company has currently suspended cover. NWIC issued a temporary suspension notice on Tuesday morning. But we expect to be reinstated next Monday or Tuesday.”

He added: “It is almost inconceivable Thomas Cook would be allowed to fail.”

TTA Worldchoice has also notified members of the change in cover, but has not put any Thomas Cook products on stop-sale.

Gary Lewis, group managing director of The Travel Network Group, which represents TTA and Worldchoice members, said: “We have informed members that if they sell Thomas Cook’s flight-only or accommodation-only product it will not be covered by supplier failure insurance. We have not put those on stop-sale, it is for members to make their own decisions.”

Northern & Westerm took similar action over American Airlines in October amid press reports that the carrier’s parent company AMR was considering entering Chapter 11 bankruptcy protection in the US.

NWIC suspended cover of American Airlines sales for two days before restoring and backdating the insurance. Radley said: “Like any insurer, NWIC has to take a prudent decision.”

The other major insurance provider in travel, IPP, has not withdrawn cover on Thomas Cook. A spokeswoman said: “Other insurers may have overreacted to the recent press reports due to their lack of experience in the travel industry.”

Ian Ailles, Thomas Cook mainstream chief executive, said:  “I’m delighted with the support we’re receiving from all our trade partners. Like us they recognise that customers can book our holidays with confidence.”

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