DIY9-10 jan30 27/1/09 11:43 Page 52
knowledge DIY
ttglive.com
Insurance
Have you
got it all
covered?
The XL failure and ongoing confusion about consumer
protection has increased the need for DIY agents to
offer suitable insurance. Dave Richardson reports
A
ll agents selling DIY holidays uled airlines but increasingly covers
should offer supplier failure cover all unbonded suppliers.
to their customers, or they could Agents should check if this cover is
find themselves out of pocket. included in the travel insurance they sell to
That happened last year after the failure of customers, or they can book it separately.
airlines including Silverjet, Zoom Airlines, The dominant company is International
XL Airways and Sterling Airlines, as agents Passenger Protection (IPP), which supplies
felt liable to refund loyal customers although the cover in most travel insurance policies.
they weren’t legally obliged to. It also provides the Abta Protection
The problem doesn’t just affect scheduled Plan, and offers agents a link to its con-
and no-frills airlines, as the collapse of sumer website for referring customers
SpeedFerries in November highlighted how (protectmyholiday.com).
ferry passengers are also at risk.
Airlines, ferries, car rental and hotels not Other ways to sell insurance
booked as part of a package are generally Agents can only sell a policy if they are an
not covered. The same applies to villas, appointed representative of an insurance
cottages, coach and rail tickets, campsites company, but IPP has got around this by
and theme parks. insuring the agent, rather than the
customer, against supplier failure.
Safeguard your customers The Abta Protection Plan costs £1.50 per
Customers are safe when booking with transaction to cover any unbonded supplier.
a credit card, but agents could face a Agents can pass this on, absorb it or mark it
charge-back by credit card companies. up (maximum £5).
Credit cards offer cover only on transactions IPP director Paul McLean says: “2008 was
of over £100, and there is no cover by debit our busiest ever year because of airline fail-
cards. ures, which caused many agents a problem.
Tour operators may cover some elements It’s like fitting a smoke or burglar alarm: many
of DIY holidays. The only other alternative is people only do it after a fire or a break-in.
insurance, which may be limited to sched- “There has been a big increase in the
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