AVIATION INSURANCE
BY
S.GIRIDHAR
MANAGER
RO COIMBATORE
Origin of Aviation Insurance
The First Aviation Policy was issued
by White Cross Insurance Agency
in UK around the year 1910
covering Accidental Damage;
subsequently extended to cover
Third Party Insurance
Modern Aviation Insurance can be
traced to the year 1909 when Lloyd's
started underwriting this business in
collaboration with British Aviation
Insurance Group in 1922.
Similar pools were formed in US. In
1928 the United States Aviation
Insurance Group was formed by
Associated Aviation Underwriters.
In 1934 The International Union of Aviation
Associations was funded by leading aviation
underwriters of UK and Europe.
In 1935 Lloyd's Aviation underwriters
Association was formed. This association
drafted the policy forms and clauses which are
being used in various aviation insurance
markets including India.
In 1949 a Standard Lloyd's Aviation Policy was
drafted.
In 1954 Based on this, Aviation Insurance Officers
Association devised its standard aviation policy
Principles
Governing
Aviation Insurance
UTMOST GOOD FAITH
Proposals are evaluated based on
Owner - name, address, age and business
Aircraft - Year of manufacture, make, model
and usage
Pilots - name , age, rating and experience
Coverage - type of hull and liability coverage
Past loss experience
Note : Policies can be underwritten only with the
approval of HO RI Dept
INSURABLE INTEREST
Right to Insure the aircraft vests with
- Owner of Aircraft
- Mortgagor
- hangar Keeper
- Repairer
3. Insured has Legal Liability towards
passengers, baggage,cargo and
property on the ground.
4. Insured has liability towards crew members
INDEMNITY
Covers
- loss or damage to the
aircraft
- indemnity is on agreed
value
- legal liability towards
passengers
SCOPE OF AVIATION INSURANCE
The risks insurable under aviation policies are
1. Loss or damage to Hulls of the aircraft
2. Legal Liabilities towards owners of the cargo carried
3. Legal liabilities towards passengers and their
baggages
4. Legal liabilities in respect of carriage of mail
5. Legal liabilities towards persons and property on the
ground
6. a) Personal accident to Aircrew
b) Personal accident to passengers
7. Loss of license of aircrew on medical grounds
8. Legal liability of airport owners and operators
9. satellite insurance
10. Products - legal liability of manufacturers
11. loss of use of aircraft following damage
AVIATION LAWS
Carriage by Air Act 1972, India
- came into force on tDecember 19,1972
Preamble
- to give effect to unification of certain rules
relating to international carriage by air as per
Warsaw Convention 1929
-1stsschedule of the Act
Hague Protocol 1955
-2nd schedule of Act,
AVIATION POLICY COVERAGE
Aviation insurance provides indemnity for
1. Aircraft Damage
2. Passenger liability as per Warsaw convention/
Montreal Convention as the case may be
3. Liability to third party at ground
4. Liability to crew and employees
5. Product liability
POLICY COVERAGE
FOR AVIATION HULL
Section I :
Provides cover for accidental loss or damage to
the aircraft against accidental loss or damage
from whatsoever cause arising while in flight or
taxing or on the ground or moored
Section 2 :
Provides cover for insured's legal liability to third
party for compensation against accidental bodily
injury ( fatal or non-fatal) to persons and
accidental damage to property caused in direct
connection with the aircraft
Section III:
Provides cover for insureds legal liability for
compensation for accidental bodily injury(fatal or
non fatal) to passengers while entering into,
being carried in or alighting from the aircraft
Legal expenses:
The company also pays (within the agreed limits
of liability),legal expenses incurred with its
written consent in connection claims for death or
injury to passengers or third parties, or loss or
damage to third parties.
Exclusions
- Illegal Purpose or any purpose other than stated
- Outside the geographical limits stated
- piloted by any person other than stated
- Total number of passengers carried
exceeding the declared number stated
- war, hijacking and allied perils
- nuclear risks
Conditions
- Insured shall use diligence to avoid accidents
- Compliance with all air navigation and
airworthiness orders and requirements
- Immediate notice of any accident likely to
giving rise to a claim.
- Policy may be cancelled by insurers or
insured by giving 10 days notice.
If cancelled by the insurer they will return
prorata portion of premium. If cancelled by the
insured, return of the premium shall be at the
discretion of the insurer.
Extensions/ Add ons :
- On the written request of the insured and on
payment of additional premium, the Policy can
be extended to cover passenger liability on an
Admitted liability basis instead of Legal
Liability (AVN 34 A).
- The policy can be extended to indemnify the
insured in respect of his legal liability for
compensation for damage to or loss of
passengers personal baggage while being
loaded into, carried in or unloaded from the
aircraft but only when arising out of an accident
to the aircraft.
AVIATION HULL WAR AND ALLIED RISKS
Basic Coverage (loss or damage to Aircraft):
- War, invasion, civil war, rebellion, revolution,
military coup
- Strikes, riots, civil commotion
- Acts for political or terrorist purpose
- Malicious acts
- Confiscation/requisition of aircraft by Govt etc
- Hijacking
Exclusions
- War between UK, USA, France, Russian
federation, China
- Confiscation by government of registration
- Confiscation for financial default/
repossession by title holder
- Delay, loss of use, consequential loss
- use of chemical or biological materials
- Hostile use of radioactive contamination
- Hostile use of electromagnetic pulse
- Hostile detonation of nuclear weapons
Conditions
- insurers may issue seven days notice to
review premium and/or geographical limits
at any time
- Automatic review of premium and/or
geographical limits on expiry of seven days
from hostile detonation of nuclear weapons
- Insurers may cancel policy by giving
seven days notice
- Automatic cancellation of policy in the event
of war between UK, USA,France, Russian
Federation, China
- Material Change in operations provision
Extensions/ Add ons:
Legal liability of the insured
towards passenger and third
party due to war and allied
perils can be covered by
charging additional premium.
AVIATION FUELLING AND
RE-FUELLING LIABILITY
Insurance Cover:
The policy covers bodily injury including
death, or damage to property caused
by the accident arising out of insured's
business as suppliers of aviation fuel
of aircraft at the locations mentioned
in the schedule.
Exclusions:
- Loss of property of the insured other than
aircraft while being fuelled or refuelled
by the insured.
- Bodily injury, property damage caused by any
mechanically , propelled vehicle on road
traffic/ any public highway and aircraft, used or
operated by or on account of insured.
- Liability for bodily injury to any person who at
the time of sustaining such injury is engaged
in the service of insured or acting on his behalf.
- Liability assumed by the insured by agreement
under any contract unless such liability would
have attached in absence of the agreement.
Conditions:
- No liability shall be admitted without the consent
of the insurer, who shall be entitled to take over
and conduct the defence of any claim.
Extensions/ Add Ons : None
AVIATION HULL DEDUCTIBLE
Airlines at times have to bear a percentage
of the loss in view of the deductibles imposed
in the Hull All Risk policy thus facing financial
difficulty. By purchasing this policy the airline
operators/owners can get relief from bearing
the deductible which are substantially high and
causing financial constraints for the owner/
operator.
Basic Coverage:
The policy provides indemnity against the
amount of deductible applied in the Hull/ and
Spares All risk policy.
Exclusions:
- Loss of damage to the turbine engine or
accessory unless such damage is caused by
fire,explosion, ingestion, external forces.
- Use of the aircraft for any illegal purpose or any
purpose other than stated.
- Aircraft is outside the Geographical limits stated.
- Aircraft is being piloted by any person other than
stated.
- Total number of passengers carried exceeds the
declared number stated
- War, Hijacking and allied perils
Conditions:
- It is a condition precedent to the liability of the
insurer that the insured should effect an aircraft
Hull and Spares All Risks Insurance.
- Policy is subject to same warranties, terms and
conditions provided in the Aircraft Hull and
Spares all risks insurance prior to the
happening of loss.
Extensions/Add Ons: None
AVIATION LOSS OF LICENSE (GROUP)
In the event of the persons insured
suffering bodily injury or illness
resulting at any time whether during or
after the period of insurance (but not
beyond a period of five years after the
expiry of this insurance) in their
incapacity then the compensation as
per schedule is payable
Exclusions:
- Death of the insured Person
- Any personal injury, illness, disease or disability
existing prior to the inception of the Policy
- Insured person taking part in riots or civil
commotion
- Intentional self injury, suicide, provoked
assault, dueling, fighting or venereal diseases
- Deliberate exposure of the Insured person to
exceptional danger
- Any personal injury, illness, disease or disability
giving rise to a claim under any previous
permanent disability
- riding or driving in any kind of race
- chronic alcoholism
Conditions:
- disputes to be referred to medical referee
- insured to authorize company to seek opinion
of the principal medical officer of the competent
civil authority to ascertain whether or not an
incapacity is presumed to prevent him to follow
his occupation
- insured person may if required have to submit
to an independent medical or surgical
examination
- Policy will cease automatically if the insured
loses or terminates his membership of anyone
of the Aircrew Association Extensions/ Add ons.
- Insured if required shall submit to an
independent medical or surgical examination.
- Policy to cease if insured losses or terminates
his membership of any aircrew Associations if
the same has been obtained through the offices
of any such association.
- This insurance shall apply while the insured is
anywhere in the world.
- Insurer has the liberty to appeal against
suspension, restriction or loss of license in the
name of insured and the insured shall provide
information and assistance for defence.
AVIATION LOSS OF LICENSE (INDIVIDUAL)
In the event of the insured person suffering
bodily injury or illness resulting at any time
whether during or after the period of insurance
(but not beyond a period of five years after the
expiry of insurance) in his incapacity then the
compensation as per schedule is payable.
Exclusions:
- Death of the insured person
- Any personal injury, illness, disease or
disability existing prior to the inception of the policy.
- Insured person taking part in riots or civil
commotion
- intentional self injury, suicide , provoked
assault, dueling, fighting or venereal diseases
- deliberate exposure of the Insured persons to
exceptional danger
- Any personal injury, illness, disease or
disability giving rise to a claim under any
previous permanent disability
- riding or driving in any kind of race
- chronic alcoholism
Conditions:
- disputes to be referred to medical referee
- insured to authorize company to seek opinion
of the principal medical officer of the competent
civil authority to ascertain whether or not an
incapacity is presumed to prevent him to follow
his occupation
- insured person may if required have to submit to
an independent medical or surgical examination
- Policy will cease automatically if the insured
loses or terminates his membership of any
Aircrew Association if the same has been
obtained through the offices of any such
association.
- The insurance shall apply while the insured is
anywhere in the world.
- Insurer has the liberty to appeal against
suspension, restriction or loss of license in the
name of insured and the insured shall provide
information and assistance for defence.
Aviation PA (Crew member)
A Policy designed to provide compensation to
pilots and members of the crew against injury,
disablement or death arising out of an accident
caused by accidental ,external and visible
means while entering into alighting from or
being as pilot member of the crew or passenger
in any licensed standard type of aircraft
anywhere in the world.
Exclusions:
Death/ bodily injury arising out of
- suicide, self injury
- any breach of law by the insured
- any breach by the insured of any air
worthiness/ navigation orders
- Insanity, insured being under the influence
of drugs/intoxicating liquor
- test flights
- insured taking part in any military, naval or
Air force operations
- death/ bodily injury or any illness
Conditions :
Accidental death shall not be
presumed by reason only of the
disappearance of the insured
person.
AVIATION PRODUCT & GROUNDING AND
OTHER AVIATION LIABILITIES INSURANCE
The Insurance Cover
Coverage A:
Personal Injury and property damage liability –
The company will indemnify the insured for their
legal liability to pay compensation including
defence cost for death/ bodily injury or damage
to property including use of loss of property
caused by an occurrence arising out of the
product hazard.
Coverage B :
Grounding Liability
The company will indemnify the insured for their
legal liability to pay as damages including
defence cost for the loss of use of completed
aircraft, occuring after delivery to and
acceptance by a purchase or operator of such
aircraft for flight operations and caused by a
grounding arising out of the product hazard.
Exclusion:
- Noise and pollution and other perils
- War, hijacking, strike, riot, civil commotion,
hostile detonation of any weapon of war,
employing atomic and nuclear fission
Conditions:
Notice of occurrence or grounding
– when an occurrence or grounding takes place,
written notice shall be given by or on behalf of
the insured to the policy issuing office.
THANK YOU
