2. 1. Aviation insurance
Aviation insurance is insurance coverage geared
specifically to the operation of aircraft and the risks
involved in aviation. Aviation insurance policies are
distinctly different from those for other areas of
transportation and tend to incorporate aviation
terminology, as well as terminology, limits and
clauses specific to aviation insurance.
3. 2. Aviation insurance History
Aviation Insurance was first introduced in the early years of
the 20th century. The first-ever aviation insurance policy was
written by Lloyd's of London in 1911. The company stopped
writing aviation policies in 1912 after bad weather at an air
meet caused crashes, and ultimately losses, on those first
policies.
The first aviation polices were underwritten by the marine
insurance underwriting community. The first specialist
aviation insurers emerged in 1924.
In 1929 the Warsaw convention was signed. The convention
was an agreement to establish terms, conditions and
limitations of liability for carriage by air, this was the first
recognition of the airline industry as we know it today.
4.
5. 2. Aviation insurance History
"Aviation in itself is not inherently dangerous. But to an
even greater degree than the sea, it is terribly unforgiving
of any carelessness, incapacity or neglect."— Captain A.
G. Lamplugh, chief underwriter and principal surveyor of
British Aviation Insurance Company (1931)
Realising that there should be a specialist industry sector,
the International Union of Marine Insurance (IUMI) first
set up an aviation committee and later in 1933 created
the International Union of Aviation Insurers (IUAI), made
up of eight European aviation insurance companies and
pools.[2]
6. 2. Aviation insurance History
• The London insurance market is still the largest single centre
for aviation insurance.
• The market is made up of the traditional Lloyd's of London
syndicates and numerous other traditional insurance markets.
• Throughout the rest of the world there are national markets
established in various countries, each dependent on the
aviation activity within each country.
• The United States has a large percentage of the world's
general aviation fleet and has a large established market.
According to the 2014 report from GAMA (General Aviation
Manufacturers Association), there are 362,000 general
aviation aircraft worldwide, and 199,000 (or roughly 55%) are
based in the United States
7. 2. Aviation Insurance History
No single insurer has the resources to retain a risk the
size of a major airline, or even a substantial proportion of
such a risk. The catastrophic nature of aviation insurance
can be measured in the numer of losses that have cost
insurers hundreds of millions of dollars (Aviation
accidents and incidents).[citation needed]
Most airlines arrange "fleet policies" to cover all aircraft
they own or operate.
Insurance fraud were the motives for suicidal passengers
to crash Pacific Air Lines Flight 773, Continental Airlines
Flight 11 and National Airlines Flight 2511.
8. 3. Aviation Industry
1. General Aviation
- Training
- Private Flights
- Business Aviation
- Agricultural
- Recreational: Paramotors/guilders etc
9.
10. 3. Aviation Industry
Air transport
- Regional Airlines
- Charter
- Full Serice Carriers
- Low Cost Carriers
- Air Cargo Operator
32. 5. Types of COVERAGE
Public liability insurance
• This coverage, often referred to as third party liability covers
aircraft owners for damage that their aircraft does to third party
property, such as houses, cars, crops, airport facilities and other
aircraft struck in a collision. It does not provide coverage for
damage to the insured aircraft itself or coverage for passengers
injured on the insured aircraft. After an accident an insurance
company will compensate victims for their losses, but if a
settlement can not be reached then the case is usually taken to
court to decide liability and the amount of damages. Public
liability insurance is mandatory in most countries and is usually
purchased in specified total amounts per incident, such as
$1,000,000 or $5,000,000.
• Nok Air covers 600,000,000 euros
33. 5. Types of COVERAGE
• Passenger liability insurance
• Passenger liability protects passengers riding in the
accident aircraft who are injured or killed. In many
countries this coverage is mandatory only for
commercial or large aircraft. Coverage is often sold on a
"per-seat" basis, with a specified limit for each
passenger seat.
• Combined Single Limit (CSL)
• CSL coverage combines public liability and passenger
liability coverage into a single coverage with a single
overall limit per accident. This type of coverage
provides more flexibility in paying claims for liability,
especially if passengers are injured, but little damage is
done to third party property on the ground.[6]
34. 5. Types of COVERAGE
• Ground risk hull insurance not in motion
• This provides coverage for the insured aircraft against
damage when it is on the ground and not in motion.
This would provide protection for the aircraft for such
events as fire, theft, vandalism, flood, mudslides,
animal damage, wind or hailstorms, hangar collapse or
for uninsured vehicles or aircraft striking the aircraft.
The amount of coverage may be a blue book value or
an agreed value that was set when the policy was
purchased.[6]
• The use of the insurance term "hull" to refer to the
insured aircraft betrays the origins of aviation insurance
in marine insurance. Most hull insurance includes a
deductible to discourage small or nuisance claims.
35. 5. Types of COVERAGE
• Ground risk hull insurance in motion (taxiing)
This coverage is similar to ground risk hull insurance not in motion,
but provides coverage while the aircraft is taxiing, but not while taking
off or landing. Normally, coverage ceases at the start of the take-off
roll and is in force only once the aircraft has completed its subsequent
landing. Due to disputes between aircraft owners and insurance
companies about whether the accident aircraft was taxiing or
attempting to take-off, this type of coverage has been discontinued by
many insurance companies.[6]
• In-flight insurance In-flight coverage protects an insured aircraft
against damage during all phases of flight and ground operation,
including while parked or stored. Naturally, it is more expensive than
not-in-motion coverage, since most aircraft are damaged while in
motion.[6]
37. 6. Product Example: Lloyd’s
• Aircraft hull and aircraft liability
• Aircraft hull insurance covers losses arising from the physical damage to aircraft
hull as a result of various perils, including war and terrorism. Aircraft liability
insurance covers operators of aircraft for third party liability.
• The risk location may be determined by one or more of the following factors:
• • Physical location of the aircraft (place of operation)
• Jurisdiction in which the aircraft is registered
• Residence or establishment of the insured
• Please see the territory specific guidance on Crystal for specific risk location
rules.
• It is possible for a contract to have more than one risk location, if, for example, it
covers more than one aircraft and the insured aircraft are registered in more
than one jurisdiction. It is also possible for the risk location rules of different
territories to overlap, i.e. where one territory determines risk location by
insured’s business establishment and another territory determines it by aircraft
registration. Therefore a single aircraft can have multiple risk locations.
38. 6. Product Example: Lloyd’s
• Aviation liability
• Aviation liability covers a wide range of legal liabilities associated with
airport and other aviation operations, excluding aircraft operations.
• The risk location is the territory in which the insured is resident or its
business is established.
• If more than one insured resident/business establishment is covered,
then each may individually create a risk location.
• Aviation products liability
• Aviation products liability insurance is taken out to provide coverage for
components used in aircraft or other aviation products, e.g. avionic
software.
• The risk location is the territory in which the insured business is
established.
• If more than one insured business establishment is covered, then each
may individually create a risk location.
39. 6. Product Example: Lloyd’s
• Aviation cargo
• Aviation cargo insurance covers losses arising from
the physical damage to cargo while it is in transit by
air and for up to 60 days whilst in storage. (After 60
days it will be seen as Property
• The risk location is usually the territory in which the
insured is resident or its business is established.
However, in a few instances, where the goods are
physically situated or being transported to or from
may also create a regulatory and tax location of
risk.
40. 6. Product Example: Lloyd’s
• Aircraft crew personal accident cover
• Aircraft crew accident insurance provides cover in
the event of death or injury to a member of an
aircraft’s crew. The insured is normally the aircraft
owner or operator.
• Where the policy is written in relation to a specified
aircraft the risk location is determined in the same
manner as aircraft liability (see above).
41. 6. Product Example: Lloyd’s
• Aircraft crew personal accident cover
• Aircraft crew accident insurance provides cover in the
event of death or injury to a member of an aircraft’s
crew. The insured is normally the aircraft owner or
operator.
• Where the policy is written in relation to a specified
aircraft the risk location is determined in the same
manner as aircraft liability (see above).
• SPACE insurance!!!
• https://www.youtube.com/watch?v=BhMSzC1crr0
• Failed rocket landing
42. 6. Product Example:
• General Aviation
• Commercial GA aircraft and fleets
• Private GA aircraft inc. helicopters
• Air taxis/charter and tourism
services
• Very light jets
• Business aviation (Industrial aid)
• Airfields and fixed base operators
• Commercial rotor-wing aircraft
and fleets
• Balloons and airships (dirigibles)
Balloons and airships (dirigibles)
Medical and rescue services
Gliding and soaring
Crop spraying (aerial applicators) and
agriculture
Clubs and flying schools
Ground service providers
Refuellers and repairers
Component manufacturers
Aerospace manufacturers
Vintage aircraft and warbirds
Drones and flight models
43. 6. Product Example:
•Airline Insurance
• All classes of airline insurance
• We can cover all classes of passenger and cargo
airline operations, from single aircraft to the
largest fleets, including low cost operators, start-
ups and national flag carriers.
• We offer not only our large capacity for aviation
hull ‘All Risks’ (physical damage) and liability
protection, but also specialist solutions to
address all types of airline insurance risk,
including war cover and reinsurance.
44. 6. Product Example:
• Aviation Hull Insurance for drones
• For high-priced, commercially-used drones, an additional hull insurance is recommended.
• Coverage includes:
• Aerial system
• Remote control
• Additional equipment (e.g. camera, surveying equipment)
Within the scope of the insurance contract, drones are insured against almost all risks, which they
may be exposed to such as:
• Flight accidents
• Damage by direct impact of lightning strike, landslide, earthquake, rock-fall, high water,
flooding, hail, avalanches, snow pressure and storm
• Fire and explosion
• Theft, robbery and unauthorized use by persons outside the company
• Damage and destruction by persons outside the company
45. 6. Product Example:
• Aero Space Insurance
• Prime manufacturers
• Component
manufacturers
• Aerospace products
liability
• International airports
• Regional and local
airfields
• Repairers & overhaulers
Repairers & overhaulers
Air traffic control
Terminal buildings liability
Aviation suppliers
Ground handlers, refuellers &
caterers
Airside liability
Airport contractors
Ferry flights
Manufacturers hull coverage
Aerospace risk consulting
46. Market Outlook
And Analysis
Aviation Insurance The working party consisted of: Justyn
Harding (Chairman) Matthew Maddocks Gaynore Moss
Andrew Pryde
AEON paper
Exercise:
Find and discuss companies that offer aviation insurance
