The “financial default” cover is part of the Trip Cancellation/Trip Interruption benefit. It protects you from loss in the unforeseen event your covered trip is cancelled due a travel supplier that goes out of business.  Most travel insurance policies which provide this cover require that you purchase the insurance within a specified number of days (usually 10- 21 days depending on policy)  from your first trip payment/deposit. In addition, many policies have a “waiting period” between the purchase date of insurance and the effective date of this coverage, typically 14 - 15 days.  Some insurance companies maintain a “Travel Supplier Restriction” list which excludes financial default cover for specific airlines, tour companies and cruise lines.