Agents and operators are being warned to keep their paperwork in order as the Air Travel Trust updates how it pays out on ATOL failures.
The ATT said it had previously been concerned about the poor standards of documentation in the industry, making it difficult for the CAA to handle claims efficiently.
With the new ATOL reforms introducing certificates showing what elements of a holiday are financially protected and by whom, the ATT will be able to pay out quicker.
Agency agreements, which ATOL holders and their agents must have in place, will also help the clarity of financial protection.
An ATT spokesperson said: "When an ATOL holder fails, the trustees want to make payments as quickly as possible so that consumers can either continue their holiday or get their money back to rebook.
"Having the right documentation in place is absolutely essential, and the revised policy makes this clear to travel businesses and sets out what their obligations are.
"This new policy brings clarity to the industry on when payments will and will not be made, and reiterates how important it is that travel businesses understand and comply with the new documentary requirements following ATOL reform."
The new ATOL regulations came into play at the end of April and the deadline for issuing ATOL certificates is 1 October.
The ATT payment policy is available from CAA website here .
