Insurance vs Travel

Amongst the current mess that is the UK and global economy, the insurance industry has taken somewhat of a kicking for their supposed slipperiness in avoiding business interruption claims following the pandemic. I have written before regarding the reasons why losses of this nature are not covered under standard business policies but I wanted to highlight an apparent unfairness in the representation of the insurance industry versus the travel industry.

Whilst many policyholders were disappointed that when they attempted to make a claim for lost income as a result of the closure of their businesses following the COVID-19 outbreak when their insurers informed them that there was no cover under their business insurance policy.

Similarly, many prospective holidaymakers had booked holidays for the coming months which were either cancelled by tour operators or will be due to the recommendation by the Foreign and Commonwealth office not to travel to any foreign destination.

Unfortunately, for many holidaymakers the ultimate response they have got from their tour operators or agents is very similar to the policyholders above.

My understanding of the law is that any ABTA or ATOL booked holiday that is cancelled by the agent or operator should generate a full refund to the holidaymaker within 14 days of that cancellation. I have full sympathy for the travel operators who simply don't have the funds available to be able to provide these refunds within this timescale and are offering credit notes to their customers. However, this is contrary to the law and the terms and conditions stated in the contract. They therefore appear to be wilfully ignoring their legal liability and claiming exceptional hardship to delay or avoid their responsibilities.

Compare this to the insurers who are merely interpreting the wording of their pre-agreed and issued contract and, in most cases, correctly pointing out that the circumstances being claimed for are not indemnified within the contract wording.

The insurers are then painted as corporate criminals and in it to make a quick buck at any opportunity whereas the travel companies are represented as unfortunate victims just trying to stay afloat.

Maybe it is down to the product they are providing where nobody likes to pay for an Intangible insurance promise but everybody loves to go on a foreign holiday?

Everyone is suffering in the current global crisis and I would encourage forbearance to all industries at this time but please, can we keep in mind the requirement to acknowledge your position in law and act accordingly.

There are legal battles ahead which might clarify the position for some policyholders with an element of contradiction within their policy wording and I am sure that once this has been ruled upon that insurers will honour any requirements of them.