Ribnitz-Damgarten, October 28, 2021: Everyone can see that the Germans’ desire to travel is picking up speed again.
And so a topic that can thoroughly spoil every traveler’s vacation is also coming back into focus: What happens if my tour operator, of all things, goes bankrupt? BRRS partner and lawyer Nils Eggers has taken a closer look at a recent legal amendment:
From November 1, 2021, tour operators must insure themselves against their inability to pay and insolvency to protect travelers through a travel insurance fund. Until now, tour operators have usually complied with the obligation to provide insolvency protection by taking out insurance. Since fall 2019, the number of tour operator insolvencies has risen significantly. The insolvencies, e.g. at Thomas Cook, have highlighted the risk of travelers not being adequately compensated in the event of insolvency. Booked and paid trips were canceled; holidaymakers were brought home from their vacation destinations. In addition, the global travel restrictions in the wake of the Covid-19 pandemic have worsened the liquidity situation of tour operators. Insurers’ calculation bases were thrown off course. The guarantee of adequate insolvency insurance became fragile.
750 million euro fund to provide security
The Travel Security Fund Act (RSG) counters these risks. Insolvency protection is now provided by a central travel insurance fund. From November 1, 2021, tour operators must conclude insurance contracts with the Travel Guarantee Fund, make payments into the fund assets and thereby protect themselves against insolvency. The fund assets are used to settle claims and the repatriation of travelers. The target capital of the travel insurance fund is EUR 750 million. Until the target capital is reached by October 31, 2027, the Federal Republic of Germany will cover the difference.
Liability limit falls
Another new feature is that the previous option of limiting liability to EUR 110 million has been dropped; the Travel Guarantee Fund is liable for insolvency losses covered by it with the entire fund assets. Tour operators with an annual turnover of less than EUR 10 million can fulfill their obligation to provide insolvency insurance by taking out insurance or providing a bank guarantee, as was previously the case. For tour operators with an annual turnover of less than EUR 3 million, the liability of insurers and banks can be limited to EUR 1 million.