Simon Calder's Helpdesk: Is it worth paying extra for insurance that includes supplier insolvency cover?

Q. For a week's package holiday with my daughter in Menorca, is it worth paying extra for insurance that includes supplier insolvency cover?

Susan Priest, Hertfordshire

A. No. If you are on a proper package holiday, ie with flights and accommodation combined as a single product, then you already effectively have supplier insolvency cover to protect you if the airline or hotel goes bust. In the unlikely event that the tour operator folds between now and your trip, then the Civil Aviation Authority will organise a full refund. If anything goes awry while you are away, the CAA will settle your hotel bill and arrange a replacement flight home. That is the gold-plated financial protection you get when you book a genuine package. In addition, you benefit from cover under the Package Travel Regulations - broadly, if there's something wrong with the holiday, from delayed flights to sub-standard accommodation, the tour operator has to fix it.

One grade down is a "dynamic package," of the sort organised by online travel agencies who source flights and accommodation from third parties. A £2.50 per-person fee for "Flight-Plus" cover will be added to the bill. If a supplier fails, the CAA says: "The Flight-Plus arranger will be required to replace that part of the holiday or provide a refund for the whole arrangement to the customer".

If, like millions of holidaymakers, you prefer to arrange flights and accommodation separately, then supplier failure cover might be worth considering. Personally, I wouldn't bother, because the scheduled airlines that serve Menorca - BA, easyJet, Jet2 and Monarch - are all rock-solid financially. And were the hotel to close its doors, then there are plenty of others available.

Finally, Menorca is an ideal summer destination. You might want to watch my Top 10: bit.ly/Men10.

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