insurance facts & options

There are basically four types of insurance involved with most common aviation matters. These are their functions, and an explanation of which elements may affect you;

1) Aircraft Hull Insurance

This is taken out by the owner of the aircraft in order to protect his investment against damage to, or loss of the aircraft itself. A charterer or lessee may not have to be involved with this, as it is usually the responsibility of the owner, and its premiums should be already included in any charter or lease price charged.

2) Third Party Liability

This is to protect the owner or operator against claims that may be made by other people, for example if the undercarriage damaged the roof of a house when the aircraft was landing, or if the wingtip hit another aircraft while manoeuvring on the ground. Once again, it is the owner's responsibility to provide this cover all the time his crews are flying the aircraft. However, on dry leases (where YOU use YOUR crews), the owner may not want to be responsible for events that take place while the aircraft is under your control, so in that case you may be required to provide this cover.

You can imagine that the potential devastation that could be wrought by an aircraft accident is considerable, and the amount of liability that third party insurance covers can be quite high. It varies according to the requirements of the country or countries where the aircraft will operate and the type of aircraft, and can range from US$ 10 million to US$ 100 million or more per single incident/accident

3) War Risk Insurance

This is applied by insurance companies and underwriters if the aircraft intends to operate into countries or areas considered by them to be dangerous. If the aircraft operates to these areas without the additional war-risk cover, then the hull and third-party cover may become invalid, and thus the whole operation become illegal.

Most of us know where the dangerous parts of the world are, and it is easy to guess where this requirement would apply, although it changes regularly depending upon the whims of the underwriters ! The cover can be taken out for a specific period, or on a 'per flight' basis. If war-risk insurance becomes necessary for your requirement, Skyline Aviation can make the appropriate arrangements

4) Cargo Insurance

International regulations demand that an airline will provide insurance cover for all passengers, baggage and cargo carried on their aircraft, up to a specified limit. This limit is set by an agreement known as The Warsaw Convention, and the cargo liability currently stands at 20 US Dollars per kilogram of cargo carried; it applies throughout the entire period during which the cargo is in the care of that airline and covers theft, damage, loss or total destruction in the event of an accident. If you feel that your cargo deserves a higher rate of cover than US$ 20 per kilo, then it is your responsibility to take out that additional insurance. Skyline Aviation can assist if required.

If the aircraft is being wet leased or dry leased by you, then ALL cargo insurance is your responsibility, and you are obliged to provide it, at least up to Warsaw Convention limits, if you are carrying cargo belonging to other persons.

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