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It only covers the event of the travel company that arranged the linked travel arrangement failing and your travel service(s) not being provided to you as a result.

This is not the same as protection for package holidays. if the arranger of your linked travel arrangement was responsible for providing a transport service, to cover the costs of getting you to your return destination if your trip includes return transport.to arrange a refund for the travel service that you were unable to receive because the arranger of the linked travel arrangement has gone out of business whilst holding your money.The law requires the arranger of a linked travel arrangement (which may include a tour operator, travel agent or travel service provider) sold in the UK to put in place financial security to protect the monies you’ve paid for a travel service in the event that the service can’t be provided because the arranger of the linked travel arrangement goes out of business (due to their financial failure). The financial protection for packages does not extend to everything- if you have unused vouchers issued by the business, or you were due a compensation payment, or a refund following a cancellation, the financial protection arranged by the tour operator will not refund you. Package holidays that are for less than 24 hours, or are for business travel, may not be protected.

to minimise the disruption to your holiday if it has already started, to cover the costs of getting you to your return destination if your holiday includes return transport, and to arrange a refund for the parts of the holiday that can no longer be provided or to assist you in obtaining a refund.to arrange a refund or to assist you in obtaining a refund if you are yet to travel, and your package holiday booking cannot go ahead because the tour operator has gone out of business (financially failed).The purpose of the financial protection is: The law requires tour operators to put in place financial security to protect monies paid for package holidays sold in the UK in the event of them going out of business (due to their financial failure).