currently be held with an insurer authorised in the UK, the Channel Islands or the Isle of Man. To maintain a high degree of confidence in the package travel industry, any amendments to the insolvency protection regime under the package travel regulations would have needed to ensure robust, watertight protections for consumers. Consumers should not be forced to rely on alternative legislation, such as the protections under the UK’s Consumer Credit Act 1974, which may have varying efficacy and may also be subject to future amendment8. Businesses might be permitted more flexibility in how they meet their insolvency obligations, provided there was no detriment to consumers. However, the proposal to relax territorial restrictions on insurance cover could have introduced unforeseen risks to consumers and businesses in relation to enforcement and jurisdictional issues in the context of disputes and data protection. Responding to its consultation, the UK government recognises that there are “bigger picture” issues at play relating to tour operators being perceived as the insurer of last resort and the dual regimes for insolvency protection when a travel operator has both flight and non-flight based aspects to their business. Given the complexity, the UK government concluded that the reform required falls outside of the scope of reform to the package travel regulations, and that it would “continue to explore these areas, working with industry to better understand what is needed”. Compulsory liability insurance for tour operators The broader concern that tour operators are not currently required to have compulsory liability insurance has not gained any traction in the UK government’s response or proposed reforms. Consumer groups have highlighted how this creates a significant risk for consumers, particularly where a tour operator is underinsured or uninsured for liability for serious injury. 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. 8 The UK government consulted on reform to the Consumer Credit Act 1974 from 19 May to 21 July 2025, with the second phase of its reform/consultation expected to touch on consumer credit protection offered by section 75 of the 1974 Act. 10 CHRISTOPHER DEACON
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