Various Policies issued in Aviation Insurance in India

Aircraft (Flight & Ground Risks) Policy :

The cover provided by the policy is to replace or make good accidental loss of or damage to the aircraft including standard components parts thereof, temporarily detached in con­nection with overhaul or repair while in the custody or control of the insured (unless other similar component parts have been substituted) from whatsoever cause arising whill the aircraft is in Flight and/or Taxying and/or on the Ground and/or Moored. The policy also covers legal liability to third parties (other than passengers), and also legal liability to passengers.

Aircraft Hull Policy Comprehensive :

The policy covers loss of or damage to the aircraft while the aircraft is in flight, taxying, on the ground or moored, liability towards third par­ties, and passengers liability.

Aircraft Hull War Risks Policy :

The cover provides for indemnity for loss of or damage to aircraft caused by (a) War, invasion, acts of foreign enemies, hostilities, civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power, (b) strikes, riots, civil commotions or labour disturbances, (c) acts of persons for political or terrorist purposes resulting in loss whether accidental or intentional, and (d) any malicious act or act of sabotage.

Aviation Personal Accident Policy (Crew) :

This is a group personal accident insurance granted to the Airline Operators providing for specified benefits payable in the event of acci­dental bodily injury to members of the crew.  The airline opera­tor is the insured under the policy and the members of the crew are designated as insured persons  The insured i.e., the airline operator, has the sole and exclusive rights of receiving any payment or of enforcing any claim under the policy.  The capital sums insured vary according to the status of the insured personnel.

Breach of Warranty Insurance :

This insurance provides that, if a claim is not payable to the insured by reason of a breach of any warranty of the policy on his part, the financer will be reimbursed to the extent of the loan outstanding at that time. This is very similar to the Agreed Bank Clause in property insurance.

Confiscation Endorsement :

This insurance is extended to include loss of or damage to the aircraft directly caused by confiscation, nationalization, seizure, restraint detention, appropriation, requisition for title or use under the order of the Government (whether civil, Military or de facto) and/or Public or Local Authority of the country and/or within the Geographical Area.  However, such loss or damage due to the orders of the Government of India or any Public or Local Authority of India is excluded.

Hijacking Endorsement :

This insurance is extended to include loss of or damage to the aircraft due to hijacking or any unlawful seizure or wrongful exercise of control of the aircraft or crew in flight by any person of persons on board the aircraft.

Loss of Licence Insurance :

The operating crew of the aircraft are required by  law to have valid professional license from the Government to work in their occupation. This license is granted after satisfactory medical examination. Renewal of the License is also subject to similar requirements. This license is liable to be suspended either temporarily or perma­nently on medical grounds.The consequent financial loss is covered by the loss of license policy.

Loss of Use Insurance Policy :

This cover is effected by the air operator to protect himself against loss of revenue arising from an aircraft being laid up for repairs due to accident.  This policy indemnifies the insured for the loss of his revenue in cases of partial losses only and not in case of total loss.

Product Legal Liability Insurance Policy :

This insurance is effected by an aircraft manufacturer or a repairer to protect himself from risks that result from the faulty design of the aircraft or those due to defective repair work.  The policy indemnifies the manufacturer or repairer all sums that he might be liable to pay as a consequence of defective workmanship or manufacture.

Ransom Indemnity Cover :

This policy includes, without any additional premium, indemnity to the insured to the extent of 60% of any payment that the insured may be constrained to make due to threats against the insured aircraft.  The balance 40% is uninsured and is at the insured’s risk.

Satellite Insurance :

This covers comprehensive insurance as under :

1. Pre-launch Insurance : This covers transportation of the satellite from the manufacturer or place of storage to the launch site, the storage of satellite at the launch site and the preparations leading up to the launch itself including the compling of the satellite with the launch vehicle.
2. Launch Insurance : This covers the satellite and the launch vehicle from the moment of launch attempt to the successful injection of the satellite into its orbit including, as applicable, the satellite having sufficient fuel and power to operate for its designated life.
3. Satellite Life Insurance : This covers the satellite for its initial 36 months of operation including failure of the power and/or fuel systems and in case of communication satellite, the breakdown of transponders according to the applicable definition of failure.
4. Third Party Legal Liability Insurance : This covers the satellite owner for his legal liability to third parties arising out of the launch and pre-launch activities and the satellite’s activity once it is in orbit.
5. Losses to Lessees of Transponders : Recently a new type of coverage has been granted for lessees of transponders who are protected against loss of revenue resulting from a catastrophic loss or a loss occurring to the transponder itself.

Terrorism Cover :

Cover against use of violence for political ends and includes any use of violence for the purposes of putting the public in fear.

Extracts from “General Insurance & Risk Management Glossary” published by  The Insurance Times, Edited by Dr. Rakesh Agarwal. Copyright of Sashi Publications, Kolkata. www.bimabazaar.com