Scheduled airline failure insurance (SAFI) provides cover for travel agents and tour operators in the event that an airline goes out of business.
In this post we will provide an essential introduction to SAFI – how it works, what it covers, and who needs to consider it.
What is Scheduled Airline Failure Insurance?
For tour operators and travel agents, it offers financial protection if an airline fails, covering the cost of booking new flights or helping customers stranded abroad.
If your customers are yet to take their flights, it will be a struggle to get a refund from an airline that has gone into administration. Even worse would be if an airline goes out of business before they are due to fly your customers home. This could leave them stranded in a far-off airport, which is why SAFI is so important.
What Does Scheduled Airline Failure Insurance Cover?
The Tour Operator or Travel Agents Net Ascertained Financial Loss which can include:
- The cost of booking new flights, usually up to an agreed limit.
- Reimbursement for any flights customers were not able to take.
- The cost of booking new return flights should an airline go into administration while customers are already abroad.
- The cost of alternative modes of transport, if no other flights are available.
Most SAFI policies include a number of exceptions. For example, they might not provide cover if you procure flights from an airline that has already gone into administration. It will also not cover any costs associated with the airline’s failure, such as missed connections or reservations.
Who Needs Scheduled Airline Failure Insurance?
Scheduled Airline Failure Insurance is crucial for travel agents and tour operators who depend on reliable airlines to ensure smooth travel for their clients. It helps them book alternative flights and handle disruptions, protecting their reputation and their clients’ travel plans. Plus, this form of cover is highly recommended and encouraged by the Civil Aviation Authority for all ATOL holders which can be a major trust signal for potential and existing customers.
Get Comprehensive Travel Industry Insurance From James Hallam
At James Hallam, we have provided specialist insurance for tour operators and travel agents for over 20 years. We have a thorough understanding of the unique risks businesses face in the fast-moving travel industry.
We will take the time to understand your business so we can tailor the best possible travel and tour insurance programme for you and your customers.
Find out more about our specialist travel industry insurance services.