December 11, 2019 / 6:59 AM / 3 months ago

Germany to repay customers of insolvent Thomas Cook

FILE PHOTO: Airplanes with the logos of air carrier Condor by Thomas Cook are seen at the airport in Frankfurt, Germany, September 24, 2019. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - Germany will give financial assistance to customers hit by the insolvency of Thomas Cook because the tour operator’s insurance cover has proved insufficient, it said on Wednesday.

“Damages that are not compensated by other parties will be settled by the federal government,” it said in a statement, confirming a report by broadcaster ARD.

Insurer Zurich’s (ZURN.S) liability is capped at 110 million euros ($121 million) but it has already registered claims worth 250 million and experts estimate total claims will reach 300 million to 500 million euros, ARD said.

A legal opinion commissioned by Zurich concluded that state liability is possible because the German government inadequately implemented a 2015 EU directive meant to ensure customers get their money back in the case of the insolvency of a tour operator, the report said.

Reporting by Thomas Seythal in Berlin and Arno Schuetze in Frankfurt; Writing by Madeline Chambers in Berlin; Editing by Clarence Fernandez and David Clarke

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