There is also the broader concern that tour operators are not currently required to have compulsory liability insurance. This creates a significant risk for consumers, particularly where a tour operator is underinsured or uninsured for liability for serious injury. By legally mandating that high levels of liability insurance be obtained from insurers within the UK, the package travel regulations can better protect both consumers and operators involved in potential claims from consumers who have been seriously injured or involved in a fatal accident, with an effective means of redress being available to consumers even if the tour operator becomes insolvent. As this author noted in the Association of Personal Injury’s PI Focus (2021), the public needs to be protected from the risks of tour operator insolvency through public liability insurance: When Thomas Cook collapsed in September 2019, many holidaymakers who had sustained injuries while on a package holiday with the tour operator were surprised to learn that it did not have public liability insurance to cover their claims. Thomas Cook largely self-insured its liability to pay compensation to customers. It only held liability insurance for cases of the utmost severity where the damages would run into several million pounds. This means that the vast majority of customers bringing a claim against Thomas Cook at the time of its collapse (or thereafter) will likely never receive full (if any) compensation. This includes financial losses those customers may endure on a lifelong basis as a result of a serious injury while on holiday. In early 2020, the National Audit Office warned that the UK taxpayer may be required to step in once again if there was another large-scale tour operator failure along the lines of Thomas Cook. This is because the ATOL Air Travel Trust Fund was left depleted after paying out £481m due to Thomas Cook’s failure and the UK government indicated it would guarantee payments if the ATOL fund is unable to make them. There is already pressure from within the travel industry to reform the ATOL scheme. Tour operators should be legally required to have a minimum level of liability insurance in place to cover claims made by customers who are seriously injured or impacted by a fatal accident on a package holiday. Compulsory insurance will build and maintain consumer confidence in the package travel industry when it is most needed. It would shift the burden of financial failure from consumers and taxpayers to tour operators and the insurance market, and ensure consumers have an effective means of redress if the worst comes to pass. 8 CHRISTOPHER DEACON
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