How to protect yourself against travel operators going bust

• Buy insurance when you book. This will ensure you are covered for unexpected cancellation from the off, even if your holiday is months away. Should anything happen between booking your trip and departing, you would need to have a travel insurance policy in place to make a claim.

• Look past the price. It's vital to get the right level of cover for you and your family at the best possible price. Look out for the inclusion of end-supplier failure because many airlines and tour operators are up against it financially. This will pay out should your airline, hotel or tour operator go bust. Also read the excess levels of the policy and ensure they are a reasonable amount should you need to make a claim for loss or theft of your baggage or other belongings.

• Don't rush. While it's important to take out a policy as soon as you book, you don't need to take the first option that comes your way. Shopping around for the best policy is quick and easy to do, and you will find policies at a fraction of the price that agents offer, often with better levels of cover.

• Ensure sufficient cover. Aim for a policy that covers at least 2 million for medical expenses, 1m personal liability, 3,000 cancellation (or enough to cover the cost of your holiday), 1,500 baggage, 250 for cash, cover for scheduled airline failure and end-supplier failure, and delay cover (e.g. 20/hour for first 12 hours).

• Check the small print. Know what you are and are not covered for. Also check over extras such as single-item limits for the likes of phones and other gadgets, and read up on the process involved should you need to make a claim. Make a note of your policy reference number as well as the contact details for your insurer.

Source: Moneysupermarket.com