Insurance covers holiday disputes

Disgruntled holidaymakers will be able to use a new type of travel insurance to fight firms who breach their contract.

The policy will cover legal fees of up to £25,000 in compensation battles.

The policy is being offered by travel insurance specialist InsureandGo and can be bought as an add-on to its travel cover, for £4 a single trip and £7 an annual multi-trip policy.

People suing tour operators, travel agents and hoteliers for breach of contract can use the dispute cover.

InsureandGo said one in four people had suffered some form of breach of contract while on holiday, such as hotels that were not fully built, swimming pools with no water in them and rooms that were advertised as having sea views but actually looked on to a building site.

But despite these problems only 5% of people had gone on to take legal action against the companies concerned.

Perry Wilson, founder of InsureandGo, said: "At least 12% of breaches of contract that occur are estimated to be worth more than £1,000, yet a lot of us either don't complain at all, or let ourselves be fobbed off by the offending company because we are scared of how much it will cost to pursue our complaint in the courts."

People claiming on the policy must pay an excess of £35 and they can only make one claim per trip. Claims must also be for at least £150.