What are my insurance responsibilities?
Generally, different jurisdictions do not require hull insurance (aircraft itself) however always require third party liability insurance.
The minimum amount of liability insurance will depend on the jurisdiction(s) where the aircraft will operate. However, other factors should be considered such as but not limited to:-
- Contractual obligations
- Type and number of passengers
- Airport requirements
- Area of operations
- Your level of comfort and security
The Civil Aviation Authority of each country shall provide their minimum requirements for liability insurance and we provide sample references such as:-
Thailand – https://www.caat.or.th/en/
Hong Kong – https://www.cad.gov.hk/english/home.html
Singapore – https://www.caas.gov.sg/
European Union – https://ec.europa.eu/transport/modes/air/internal_market/insurance_en
United Kingdom – https://www.caa.co.uk/Aircraft-register/Registration-information/Mandatory-insurance-requirements-for-aircraft/
We would recommend to check the minimum requirements of each country you operate for compliance.
Whilst hull insurance is not required, it is prudent to protect yourself with hull insurance. Aircraft assets are valuable and not having cover may significantly impact your business and financial position.
My aircraft is currently not flying. Do I need to insure it?
We recommend that aircraft on ground only also be covered with hull and liability insurance as the hazards still exist. Occurrences such as typhoon, lightning, flooding, fire, earthquake, volcanic eruption, tsunami, collapse of hangar, movement of other aircraft or equipment within your facility or simply movement of your own aircraft by strong wind may damage your aircraft. In connection with ground only cover, you may have incidental third party liability to protect yourself in the event of an accident during engine run-up and maintenance flights.
Who needs to named under my policy?
The aircraft registered owner, operator, lessor, lessee, financing entities, engine owners and/or any other entity who has fiduciary interest on the aircraft.
Whose responsibility is it to ensure that insurance cover exists for each flight?
It is the aircraft operator’s responsibility.
Generally, Aircraft Operator means the person or entity, not being an air carrier, who has continual effective disposal of the use or operation of the aircraft; the natural or legal person in whose name the aircraft is registered shall be presumed to be the operator, unless that person can prove that another person is the operator.
What is an SDR?
SDR means “Special Drawing Right” as defined by the International Monetary Fund. The full description of the SDR can be found at https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR
Briefly, the SDR serves as the unit of account of the IMF and some other international organisations. Its value is based on a basket of key international currencies. The SDR is already in use in international regulations covering mandatory aircraft insurance for public transport aircraft.
To view the current conversion rates from SDR’s to other currencies and vice versa see the IMF website SDR conversion rates.
The amount of minimum liability fluctuates due to SDR exchange rates. What should I do?
The Civil Aviation Authority will normally consider evidence of insurance (certificate) and therefore compliance with the Regulation, on the basis of the exchange rate between your policy currency and the SDR in place at the inception of the policy.
However, owners and operators need to be aware that it is your responsibility to ensure that adequate cover exists for each and every flight. If you have concerns over your level of cover, you may contact us for advice.
Is “Combined Single Limit” acceptable as a means of meeting minimum insurance requirements?
Yes, providing it satisfies the combined minimum requirements for each element of the third party, passenger, and baggage liability.
What is the definition of a passenger?
Generally accepted definition is any person who is on a flight with the consent of the air carrier or the aircraft operator, excluding on-duty members of both the flight crew and the cabin crew.
Is a person under instruction considered to be a passenger or a member of the crew?
Anyone on board an aircraft must either be a member of the crew or a passenger. In order to be a member of the flight crew a person must hold an appropriate licence. There are however certain exceptions to this, for example, it is allowed that someone without a licence to act as a member of the flight crew where they are obtaining instruction in flying from a flying instructor on board the aircraft (i.e. the typical dual instruction flight). Therefore, if the person under instruction either has an appropriate licence or comes under the exception, they are considered to be a crew member, if not they are considered to be a passenger.
What is the standard claim procedure?
There is no specific step by step procedure and it will depend on the gravity of the claim e.g. minor aircraft hull damage only vs. aircraft crash involving death of passengers and third parties. However, we may share general claim guidelines as follows:-
1. You must give notice as soon as reasonably practicable of any claim or potential claim or occurrence, incident or circumstance likely to give rise to a claim under your policy. Usually in this time and age, within 24 hours is the practice. Preliminary details should include aircraft, registration number, place of loss, general description of damage, photos and site contact personnel details.
2. Provide full particulars in writing of such claim or potential claim or occurrence, incident or circumstance likely to give rise to a claim, and immediately forward any letters or documents relating thereto comprising of all log books and other records in connection with the aircraft.
3. For expected liability claims, give notice of any impending prosecution.
4. Render such further information and assistance as the insurer may reasonably require.
5. Not act in any way to the detriment or prejudice of the interests of the insurer.
6. Not make any admission of liability or payment or offer or promise of payment without the written consent of the insurer.
In the event of theft which is likely to give rise to a claim under your policy, you must also report details to the police as soon as is reasonably practicable and provide a copy of the official police report / crime number to the insurer at the time of claim.
In addition to the above guidelines, an adjuster and/or lawyer would be appointed to be agreed by the insurer to assist you in case of a claim.
What are the required claim documents?
Basic claim documents, as applicable, are as follows:-
- Incident Report
- Aircraft Certificate of Registration
- Aircraft Certificate of Airworthiness
- Aircraft Certificate of Maintenance Release
- Aircraft Maintenance Logbook
- Aircraft Engine Logbook (each engine for modular models)
- Pilot License
- Pilot Logbook
- Pilot Latest Medical Certificate
- Passenger Manifest
- Cargo Manifest
- Loadsheet/Weight and Balance Sheet
- Weather Report (en route and at arrival)
- Last entry from Technical Log
- Passenger Demand Letters
- Aircraft Lease Agreement
Underwriters may request for more documents depending on the type and gravity of the accident, as needed.