As far as English law goes, the position is this.
They are just simply wrong.
Come what may, if they cancelled then you are entitled to a refund. They could possibly try to avoid that by offering you a deferment but if that isn't acceptable to you then they have to refund.
If the issue here is that they are going bankrupt and so can't afford to give you a refund then that is clearly a factor to consider because the reality is that you can't have what isn't there.
As far as insurance goes, it is all very well but you may have a claim against them but that does not extinguish your claim against the chalet owners.
You can always Sue them for the money. It isn't expensive to do that. Obviously if they go under then you won't recover but at least it will make your debt priority.
To be honest, I'm sure the position is the same in scotland because the law of contract is broadly similar everywhere.
Can I clarify anything for you?