The German government is set to compensate Thomas Cook customers after admitting that the tour operator’s insurance cover in the country falls well below the liabilities from its collapse.
Zurich, the travel group’s German insurer, has a liability capped at €110 million, but has already registered claims worth €250 million, while estimates of total claims range between €300 million and €500 million. “Damages that are not compensated by other parties will be settled by the federal government,” it said in a statement in response to a report from ARD, the broadcaster.
Thomas Cook was one of the world’s largest holiday businesses, with 21,000 employees in 16 countries, including 9,000 in Britain, and 22 million customers a year. At the time of its failure in September, it had a balance sheet deficit of more than £3 billion, including £1.9 billion of debt.
According to ARD, legal opinion commissioned by Zurich has concluded that the state is liable as a result of the inadequate implementation by the federal government of a 2015 EU directive designed to ensure that customers recoup their money in the event of a tour operator becoming insolvent.