So, is there anything you can do to prevent holiday disaster?

Of course you can't stop the recession, which means you can't prevent travel companies getting into financial difficulty and potentially going bust. The biggest precaution you can take to mitigate these circumstances is to get yourself comprehensive travel insurance.

You don't need to spend a fortune to get a decent policy, but you do need to pay attention to what different policies offer you - cheap is not always best. It might be boring, but the key is to read the small print and make sure you get what you pay for.

Make sure you choose an ATOL bonded tour operator. If you book a package holiday, as long as your tour operator is ATOL bonded, all aspects of your trip - flights, car hire etc - will be covered by your insurance policy should any of the companies involved go into administration.

Look out for SAFI. If you book your flights independently, then you're offered slightly less protection. If you're concerned, it's worth checking if your policy offers you SAFI - Scheduled Airline Failure Insurance - which will protect you from the financial failure of your airline. Most travel insurance policies will not offer you this as standard, but you can add it on to your existing policy from as little £5 per person from Protectmyholiday.

What else to look out for when choosing travel insurance...

• The Foreign and Commonwealth Office states that a decent insurer should offer you at least £1 million to cover medical expenses in Europe.
• A good policy will also cover you should you have to cancel or cut short you trip due to unforeseen circumstances like an accident.
• Travel insurance won't cover you if war breaks out but some policies do cover for terrorist attacks - essentially, the more stable your chosen destination, the cheaper your premium will be.

A few things to remember.....

• If you're travelling to Europe an EHIC card is well-worth having. It entitles you to state-provided healthcare should you need it during your trip. (You may have to pay extra for medicines though). You can get a card from the Post Office or the EHIC website for free. At this point I can't stress enough that while these are handy, they ARE NOT a substitute for travel insurance, so don't travel without any.
• If you have any kind of accident whilst drunk or on drugs your insurance policy will not cover you.