Does Your Connecticut Aviation Insurance Cover Hostile Acts?

Circumstances surrounding the recent tragic crash of Malaysia Airlines flight MH17 is still underway, however early evidence indicates that it’s very likely the aircraft was under fire as it flew over Ukraine. Allegedly, a missile fired from territory in eastern Ukraine struck the hull of the aircraft which ultimately resulted in the crash. U.S. assistance in the investigation has been promised to facilitate the aid of a credible investigation. To date, all parties involved in the conflict in Ukraine have denied any involvement in the event and the full story remains unknown.

The damages however, have been done and could be potentially have devastating ramifications for Malaysia Airlines. The even raises some discussion about the jurisdictional limits of certain types of insurance coverage held by many airlines. Traditional hull insurance coverage has limits which may exclude disaster such as acts of war and other hostile perils. Depending on how it is written, an all-risk hull insurance policy could protect airlines from financial ramifications of war and allied peril, however there is also separate coverage available.  Passenger liability coverage associated with these events will also fluctuate widely depending on how a policy is written. As with the hull insurance, an all risk liability policy may provide compensation passengers and their families should an accident occur. In many cases airlines carry a detached war-risk policy that covers both hull and passenger liability in the event of an attack.

Current legislation mandates that war risk insurance coverage must include hull loss and passenger liability as essential elements of this coverage, however they may have other exclusions such as nuclear threats. These regulations were enacted to help ensure that airlines that hold these policies are protected from these events where they may not have been through their standard coverage. War-risk policies are available both from the U.S. government for domestic airlines as well as through the private commercial insurance market.

Flying over international spaces does present a huge risk for airliners but is an essential business function in today’s global economy. Having the right Aviation insurance is essential to the success any security of any airline.  At Sinclair Risk and Financial Management we help our aviation clients assess their risk exposures so they can better understand the hazards they may come up against. We also provide solutions to mitigate those aviation industry hurdles, to keep airlines flying high and in the green. Our Connecticut Aviation Insurance specialists can assess your current policy and help direct you towards the most comprehensive solutions available. To find out more about our services, give us a call today at (877) 602-2305.