Insurers for tour operators are looking to save millions of pounds, after the Court of Appeal ruled that customers claiming for injuries abroad must prove liability.
An argument has been raging between consumer groups and tour operators since the implementation of the Package Travel Regulations in 1992, as to whether the tour operator should automatically be deemed liable if someone is injured on holiday.
A senior partner in Leeds-based law firm Mason Bond, Stephen Mason, is a troubleshooter for the tour operator business.
“Tour operators and their insurers will save money in two ways. Firstly, courts will not award damages in as many cases and, secondly, it will help to discourage helpless claims.”
He added over the past two years, there had been a growing trend for group actions claiming outbreaks of illness in hotels, which has hit tour companies hard.
Director of Euclidian Group, which specialises in cover for tour operators, Alan Lumsden, said: “On balance, this is good news for insurers, but the cost savings are difficult to estimate. The savings could be £2,000 for a broken leg or £2m for someone who has become paraplegic as a result of an accident.”
Tour companies have had a difficult few months, as many were left unable to trade after the collapse of Independent Insurance, which was one of the industry's leading providers of public liability and bonds for package firms.
Many have suffered losses as a result of outstanding claims that Independent is unable to meet.
The most frequent causes of complaints were delays and lost or damaged baggage.
Insurers have expressed concern over the growing incidence of flight delays, which increases claims costs.