Financial protection arrangements for EU customers

The Directive EC No 2015/2302 on package travel and linked travel arrangements (Directive) states that organisers must have financial protection arrangements in place for travellers. At article 18, the Directive requires that Member States recognise each other’s financial protection requirements.  When the UK left the EU, a decision was made that financial protection arrangements in the UK would no longer be recognised as being sufficient in the EU and vice versa. The UK’s implementing legislation, the Package Travel and Linked Travel Arrangements Regulations 2018 (PTR) was amended to reflect this.


The PTR otherwise remains largely as initially implemented (for now). Regulation 19 (1) of the PTR requires:

“The organiser of a package who is established in the United Kingdom must provide effective security to cover, in the event of the organiser’s insolvency, the reasonably foreseeable costs of…” refunding payments to travellers.


The Directive at article 17 requires:

“Member States shall ensure that organisers established in their territory provide security for the refund of all payments made by or on behalf of travellers insofar as the relevant services are not performed as a consequence of the organiser’s insolvency…”


The key phrase in both the PTR and the Directive is “established”. Established means the “actual pursuit of economic activity”. So any organiser who pursues economic activity in the relevant market (UK or EU) must provide financial protection in that country under the Directive and any nationally implementing legislation.


However, a UK organiser who picks up the occasional booking from an EU national who happens upon their English language website, pays in pounds sterling and contacts them in the UK to make any booking arrangements, does not need to have separate financial protection arrangements in place for these EU customers because they are not actually pursuing economic activity in the EU.


Factors to consider in whether you are “established” and pursuing economic activity are:


  1. Do you actively pursue EU customers by placing marketing and advertising in a Member State?
  2. Do you advertise prices in other currencies?
  3. Do you have a local rate telephone number for other countries?
  4. Do you have a foreign language website or a translate function on your website?


There are other factors but the above might indicate that you are pursuing EU customers, in which case you must have financial protection in that EU Member State.


In addition to considering financial protection, if you are selling in the EU you must consider your Tour Operator Combined Liability Insurance Policy. Very few of the potential insurers are licensed to underwrite their policies in Europe so if you are doing this you may need to change your insurer.




The following are good sources of information in relation insurance and obtaining financial protection in the EU should you conclude that you do need to hold such protection:


McGregor Insurance Brokers – – David is able to provide assistance in relation to EU financial protection and insurance options open to organisers through an EU based/regulated broker.

Arcus Solutions – – Julie can provide information about Arcus Solutions who are able to provide financial protection in the EU. Arcus Solutions is established in France and has been underwriting bonds in Ireland, Germany and Austria and is also providing travel bonds and surety products across the EU to The Netherlands, Belgium, Sweden and Norway.




If you have any queries about anything in this article please contact Claire Ingleby (claire,


Please note this information is for general guidance only and is not intended to be a substitute for specific legal advice.


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