Aircraft Hull and Liability Cover
There are wide variety of policies and coverage available an organization or an individual connected with aviation. They range from those covering airline operators, major airports and small aircrafts to component part manufacturers. A typical aircraft policy covers the hull risks, the insureds’ liability to third parties and passengers and their baggage. It is divided into sections as described below;
This section covers loss of or damage to aircraft and is divided into three parts, as here below.
The insurers will at their own option pay for, replace or repair accidental loss of or damage to the aircraft described in the schedule arising from risk covered (those risks being generally flight, taxiing and ground). The policy is generally on the agreed value basis. If the aircraft disappears and remain unreported for a specified number of days (usually 60 days) but the period can be reduced to as little as 15 days, the this will be covered as total loss.
If the aircraft is covered for a flight risk, then in addition, the insurers will pay up to 10% of the aircraft value in respect of reasonable emergency expenses especially incurred by the insured for the immediate safety of the aircraft in the event of damage to the aircraft or forced landing.
Exclusions applicable to this section
- Standard wear and tear
- Defects or failure or damage to any one unit by anything which has a progressive or cumulative effect
- Expenses or losses incurred as a result of replacing undamaged parts which may be required by regulations
Conditions applicable to this section
There are five conditions applicable. These are;
- No repairs or dismantling are allowed without the underwriters’ consent unless required in the interest of safety or to prevent further damage or order from the appropriate authority
- In the event of total loss, the underwriters will either pay for or replace the aircraft and in that event, they may take the aircraft and its relevant documents as salvage and will cancel cover for that aircraft.
- On the other hand, in the event of total loss, the amount to be deducted shall be any deductible specified in the policy schedule
- The insured may not abandon the aircraft to the underwriters
- No claim will be paid under this section if there are other hull insurances in force unless the underwriters are aware of their existence.
Legal liability to Third parties (other than passengers)
This section is divided into three sections namely,
- Limits of Indemnity.
The underwriters will indemnify the insured for all sums that the insured becomes legally liable to pay as damages, including costs in respect of accidental bodily injury or property damage caused by the aircraft or by any person or objects falling from there.
Exclusions applicable to this section.
- Injury to employees, directors, or partners of the insured in the business whilst acting in the course of employment. Or duties for the insured.
- Injury or loss sustained by any member of the flight, cabin crew or other crew whilst engaged in the operation of the aircraft.
- Injury sustained by any passenger whilst entering on board or alighting for the aircraft
- Loss or damage to property belonging to or in care custody or control of the insured and claims directly or indirectly occasioned through or in consequence of noise, pollution and contamination of whatsoever – this excludes claims arising from noise, pollution and contamination, electrical and electromagnetic interference, interference with the use of property, unless cause by or resulting in a crash, fire, explosion or collision.
Limits of Liability
This section states that an addition to the limit of liability, insurers will pay legal costs and expenses incurred with written consent in defending any action brought against the insured for compensation for damages covered by the section. If the amount paid or awarded in settlement exceeds the policy limits, insurers liability will be will be limited to that proportion which the policy bears to the amount paid for compensation damages.
Legal Liability to Passengers.
The underwriter will indemnify the insured in respect of all sums which the insured shall become legally liable to pay, and shall pay compensatory damages in respect of
- Accidental bodily injury to passengers while entering, on board or while alighting from the aircraft.
- Loss of or damage to baggage and personal articles of passengers arising out of accident to the aircraft.
Limits of Liability
This section provides that before any passenger boards the aircraft, the insured, the insured shall take such measures as are necessary to limit or exclude liability for claims for injuries and loss of baggage to the extent permitted by the law.
In the event that this is not done, the insurers liability under the section shall not exceed the amount of legal liability, if any that would have existed had the provision been complied with.
The underwriters are not liable for injuries or loss sustained by any:
Directors or employees of the insured or partners of the insured in the insured’s premises while acting in the course of employment with or duties for the insured.
Members of the flight, cabin or other crew whilst engaged in the operation of the aircraft.
General Exclusions Applicable to All Sections
The policy does not apply;
- While the aircraft is outside the geographical area.
- While the aircraft is being used for any illegal purposes or for the purpose of other than the ones stated in the schedule
- While the aircraft is being piloted by any other person other than as stated in the policy schedule.
- While the aircraft is landing or taking off or attempting to do so from place which does not comply with the recommendations laid down by the manufacturer of the aircraft.
- While the number of passenger being carried in the aircraft, is in excess of the number declared in the policy schedule
- Claims arising out of war
- To loss arising directly due to ionizing radiations or contamination from radio activity
This section also includes the usual conditions and requirements found in all insurance contracts such as:
- Due observance of policy terms and conditions
- Compliance with air navigation orders
- Subrogation rights
- Notifying the company in the event of change in the risk insured
- Cancellation condition
- Assignment of the policy only with the consent of the insurer
- Insured not to admit liability
- Arbitration clause