Travel insurers will be forced to compensate customers for flights which were delayed or grounded as a result of the New York plane crash.

Many policies also allow customers to cancel their holidays altogether if they are delayed for a certain number of hours.

Royal & SunAlliance (R&SA) head of travel Fiona McDonald said: "As the plane crash appears to have been an accident and not an act of terrorism, most policies will cover travel delay, which starts four to 12 hours after the initial flight time.

"We will be paying out for such claims."

A spokeswoman for AXA said the company would be paying out for trips that were delayed longer than 24 hours.

However, customers who decide they do not wish to travel following the plane crash will not be compensated if their airline is still flying, as most insurers' policies do not cover a "disinclination to travel".

In the hours following the plane crash, all flights out of New York were grounded and European airports were delaying or re-routing flights into the city.

Heathrow, the world's busiest international airport, suffered chaos as many passengers were delayed for much of Tuesday.

At the time Insurance Times went to press on Tuesday, many flights from Heathrow Airport were
still not running on time.