Travel insurance vital as holiday firms go bust

Just days after the collapse of Globespan and its airline subsidiary FlyGlobespan, which left 4,500 passengers stranded overseas, another UK-based tour operator has folded.

Allbury Travel Group, which operated several travel brands including Libra Holidays, Argo Holidays and Jetlife, went bust with about 100 customers abroad and 4,000 advance bookings.

Although customers who booked package holidays with Globespan and Allbury will be protected under the Civil Aviation Authority's (www.caa.co.uk) ATOL scheme, those who booked only flights have no such protection.

Passengers with only standard travel insurance are unlikely to be able to claim a refund for lost flights, but those who took out Scheduled Airline Failure Insurance, which is available as an optional extra, will be covered.

As more tour operators and airlines are expected to succumb to the difficult financial climate, Scheduled Airline Failure Insurance - which costs just a few pounds extra - is becoming an increasingly wise purchase.

Those whose holidays or flights have been cancelled due to the collapse of Globespan and Allbury should check the small print of their travel insurance documents or speak to their broker to find out what is covered.

Those who have been rebooked on holidays or flights departing at a later date may be able to transfer their travel insurance to their new holiday.

One online travel agency, travelrepublic.co.uk, is offering to refund customers who booked FlyGlobespan flights through the company, which launched a 'total financial protection' scheme last January.

In the meantime, the government is reviewing ATOL regulations to see if protection should be extended to all travel bookings, not just package holidays.

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