11 travel insurance flight benefits you should know

10. Supplier failure and airline insolvency coverage

Supplier failure coverage protects you if an airline, tour operator, or third-party vendor fails before travel and leaves you with nonrefundable losses. This benefit differs from airline or credit-card protections because it looks at the supplier’s insolvency and broader defaults. For example, if a small airline declares bankruptcy and cancels flights, a policy with supplier failure coverage can reimburse prepaid airfare and package components that weren’t protected otherwise. Not all policies include this, and coverage limits or waiting periods may apply. Tip: if you book with small operators or long, nonrefundable packages, choose a policy that specifically lists supplier failure or financial default coverage. Takeaway: Supplier failure protection avoids losses when vendors collapse and your booking isn’t refundable elsewhere.