The Package Travel, Package Holidays and Package Tours Regulations 1992 and the Civil Aviation (Air Travel Organiser’s Regulations) 2012 require travel companies to provide security from their insolvency for the money that consumers pay for certain combinations of travel arrangements. Broadly speaking, the effect of these two pieces of legislation taken together mean that travel arrangements sold as a ‘Package’ require travel financial protection whether or not they include a flight. Packages including a flight, and flights sold with accommodation or self-drive care hire (‘Flight Plus’) will require the seller to hold an Air Travel Organiser’s Licence as well as to carry financial protection.
Travel Trusts are increasingly favoured over bonding or insurance policies as a means of providing the financial protection that the law requires travel companies to have in place. Why?
A travel bond takes away the cash flow restrictions that a travel trust account can represent for some travel companies. UK legislation requires that bonding be linked to the membership of a trade organisation such as ABTA or ABTOT. After the initial application, there isn’t much more to do other than to pay the premium every year. We have access to bond brokers that offer a fast turnaround, will consider any travel related bonds and are highly competitive on quotes.
Where a trade organisation bond isn’t appropriate an insurance policy may be a good alternative. A proposal would be based on the provision of satisfactory trading history or business plan (for a newly incorporated company). There are a number of financial failure and passenger protection insurances available on the market, and we are familiar with all of them. Our independence in the market allows us to assess which scheme is best for your business.