insolvency protection
noun · Insolvenzsicherung
A German organiser may not take payments before he has secured them against his own insolvency, and he proves the security to the traveller with a Sicherungsschein. The protection covers both the refund of the price and the cost of returning home, and a traveller who receives no certificate should not pay.
Which translation, when
Why
Insolvency protection is the Insolvenzsicherung, and it deserves an entry because the German arrangement is stricter than a general expectation that a solvent business will perform. An organiser may not accept payments on the travel price before he has ensured that the traveller will be reimbursed what he paid if services are not provided because the organiser becomes insolvent, and that the necessary cost of the return journey will be met if the collapse occurs during the trip. The security is evidenced by a Sicherungsschein, a certificate the organiser hands to the traveller, and until the traveller has it he may refuse to pay, which makes the document the practical test of whether the regime has been observed. The cover therefore has two halves that a translation should keep visible: the money already paid and the journey home. The second is what makes headlines when a large operator fails in high season, and it is the reason the protection is organised through dedicated funds and insurers rather than left to individual bank guarantees, since the aggregate exposure of a single season exceeds what a guarantee would carry. Two further rules complete the picture. A travel agent who takes money on the organiser’s behalf must observe the same requirement before passing it on. And an organiser established elsewhere in the European Economic Area satisfies the German requirement through the security provided under the law of his home state, so a booking with a foreign operator is protected under another system rather than unprotected.
Typical mistakes
- The organiser may not take payments before providing the security, so a demand for a deposit without a certificate does not comply.
- The protection covers the return journey as well as the refund, so describing it as a money-back guarantee omits half of it.
- Organisers established elsewhere in the European Economic Area are covered by their home state’s security, so a foreign booking is not unprotected.
What matters
Checking a German booking confirmation: the traveller should look for the security certificate before paying, and any advice should mention that the cover extends to the return journey and not only to the refund.
What the machine misses
The engine renders insolvency protection as Insolvenzschutz or Zahlungsausfallschutz, neither of which the statute uses, and the German institution is the Insolvenzsicherung evidenced by a Sicherungsschein, covering both the refund of the price and the cost of getting travellers home; the invented wording also hides that the traveller may refuse to pay until he holds the certificate.
Examples
| insolvency protection | die Insolvenzsicherung |
| the security certificate | der Sicherungsschein |
| reimbursement of the travel price | Erstattung des Reisepreises |
| the cost of the return journey | die Kosten der Rückbeförderung |