The Scottish Passenger Agents’ Association (SPAA) is warning the trade about insurance companies refusing to pay out for clients who were affected by the drone chaos at Gatwick before Christmas.
More than 1,000 flights were cancelled at Gatwick because of repeated drone sightings over a three-day period in December causing disruption for 140,000 passengers.
SPAA said agents who have made claims on their travel disruption insurance (TDI) policies might not receive a payout as insurance companies are claiming drone disruption is not covered by their policies.
Alan Glen, director of Glen Travel and a SPAA council member, made a £10,000 claim against his TDI policy when a customer’s holiday to Barbados was postponed for two days because of the drone incident. But his insurers said the policy did not cover this type of disruption.
“This is just one case, but the drone incident affected thousands of travellers so it probably only scratches the surface,” said Glen.
“The overall cost to the travel industry is still unknown but runs into many millions.
“The TDI policy – a force majeure insurance – was created as a direct result of the Icelandic volcanic ash cloud that caused widespread travel disruption in 2010 and which exposed a huge void in responsibilities.
“Insurance companies always played the ‘force majeure’ card to avoid paying out and, consequently, TDI was meant to cover the operator for potential loss from clients’ travel disruption resulting from unforeseen events.”
Glen is now concerned that his agency could face legal action from the affected client following the decision by the insurance company.
“I’m furious about it and I think that it is an absolutely disgraceful way for insurance companies to act,” he added.
“They say that what is covered is contained in the policy, but when there has never been an event like this before, how could a drone incident possibly be listed?”
But a spokesperson for the Association of British Insurers said: “The drone disruption at Gatwick airport in December was an unprecedented incident, but this is the only case of this kind that we’re aware of.
“Customers who held travel insurance including disruption cover have been able to claim for additional costs in the usual way. Travel agents claiming on their commercial insurance should check the terms of their policy.”
Dr Matthew Connell, director of policy and engagement at the Chartered Insurance Institute, added: “Whatever the rights or wrongs of this particular case, it is clear that insurance professionals will need to look carefully to learn the lessons of this difference in interpretation between the insurer and their client to make sure policies are set out in a way that leaves clients understanding exactly what is covered.”
SPAA is calling for insurance companies to “review their approach” to claims resulting from disruption caused by drone incidents and asking for “greater clarity within policies about the scope of coverage”.
“The organisation believes that insurers need to clearly identify incidents or events for which they will not pay out against,” added SPAA in a statement.