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Bond

A bond is similar to an insurance policy. It's a formal undertaking from an approved bank or insurance company (bond obligor) to pay a sum of money to ABTA in the event of the Member’s financial failure, primarily for the purpose of reimbursing customers who would otherwise lose money which they had paid.

You'll need to buy your bond from an authorised provider. You'll find a list of these at the end of this page. The cost of the bond is a matter between you and the bond obligor; it will vary depending on your business model, but may be between 1% and 5% of the value of the bond itself.

We’ll tell you how much you need to bond for, once your membership application has been approved. Once we’ve received your bond, your membership will be granted.

Agent

If you're acting as an agent, it's a condition of ABTA membership that you provide us with a bond or other applicable security.

Bonding rates are set by us and are subject to review. Currently, a new Member conducting agent business will be required to provide a bond in respect of that business at the following rates on the annual rate of Applicable Risk Turnover (ART)*.

Applicable Risk Turnover    Bond Required 
£1,000,000 or less    £37,500 minimum amount 
£1,000,001 to £2,000,000    £37,500 plus 3% x ART excess over £1m 
£2,000,001 to £5,000,000    £67,500 plus 4.5% x ART Excess over £2m 
Over £5,000,000    £202,500 plus 2.25% x ART excess over £5m 

The rates are cumulative. For example, a Member with an Applicable Risk Turnover of £2,500,000 and no deficit would be bonded as follows:

Rate        Bond 
Up to £1,000,000        £37,500 
£1,000,001 to £2,000,000    3%    £30,000 
£2,000,001 to £2,500,000    4.5%    £22,250 
Total bond        £89,750  

Principals

ABTA has no bonding requirement for principals but, if you’re acting as a principal, the law requires you to provide financial protection for certain kinds of travel arrangements.

If you want to provide us with a bond for your non-licensable or single element activity, this is normally for 15% of gross turnover for new Members, with a minimum of £5,000, although higher bonding levels will apply if turnover is concentrated in a single quarter of the year or if there's a pattern of abnormally early collection of deposit/balance payment. The turnover on which the bond is based is the projected gross turnover for the current year or the audited turnover for the preceding year, if greater. If breakage deposits are charged, these must be bonded at 50% of the total collected.

*ART. This is your total bondable turnover as a retail business, excluding: all foreign currency; 90% of sales of rail tickets issued under an ATOC agreement; 90% of sales of air tickets issued under an IATA agreement; and sales of scheduled stage fare bus and coach tickets within the British Isles.

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