INTRODUCTION OF INDIAN AVIATION SECTOR

A proud Air India Flying

Aviation Industry in India is one of the fastest growing aviation

industries in the world. With the liberalization of the Indian aviation sector,
aviation industry in India has undergone a rapid transformation. From being
primarily a government-owned industry, the Indian aviation industry is now
dominated by privately owned full service airlines and low cost carriers.
Private airlines account for around 75% share of the domestic aviation
market. Earlier air travel was a privilege only a few could afford, but today air
travel has become much cheaper and can be afforded by a large number of
people.
The origin of Indian civil aviation industry can be traced back to 1912,
when the first air flight between Karachi and Delhi was started by the Indian

State Air Services in collaboration with the UK based Imperial Airways. It was
an extension of London-Karachi flight of the Imperial Airways. In 1932, JRD
Tata founded Tata Airline, the first Indian airline. At the time of independence,
nine air transport companies were carrying both air cargo and passengers.
These were Tata Airlines, Indian National Airways, Air service of India, Deccan
Airways, Ambica Airways, Bharat Airways, Orient Airways and Mistry Airways.
After

partition

Orient

Airways

shifted

to

Pakistan.

In early 1948, Government of India established a joint sector company,

Air India International Ltd in collaboration with Air India (earlier Tata Airline)
with a capital of Rs 2 crore and a fleet of three Lockheed constellation
aircraft. The inaugural flight of Air India International Ltd took off on June 8,
1948 on the Mumbai-London air route. The Government nationalized nine
airline companies vide the Air Corporations Act, 1953. Accordingly it
established by 1995, several private airlines had ventured into the aviation
business and accounted for more than 10 percent of the domestic air traffic.
These included Jet Airways Sahara, NEPC Airlines, East West Airlines,
ModiLuft Airlines, Jagsons Airlines, Continental Aviation, and Damania
Airways. But only Jet Airways and Sahara managed to survive the
competition. Meanwhile, Indian Airlines, which had dominated the Indian air
travel industry, began to lose market share to Jet Airways and Sahara. Today,
Indian aviation industry is dominated by private airlines and these include
low cost carriers such as Deccan Airlines, GoAir, SpiceJet etc, who have made
air travel affordable.
But one of the major challenges facing Indian aviation industry is
infrastructure constraint. Airport infrastructure needs to be upgraded rapidly
if Indian aviation industry has to continue its success story.

HISTORY OF AVIATION INSURANCE

Aviation Insurance was
first introduced in the
early years of the 20th
Century.

The

aviation

first

insurance

policy was written by

Lloyd's of London in
1911.

The

company

stopped
aviation

writing
policies

in

1912 after bad weather

and
A light flight of 1911

the

resulting

crashes at an air meet

caused losses on many

of those first policies.

It is believed that the first aviation polices were underwritten by the marine
insurance Underwriting community.
In 1929 the Warsaw convention was signed. The convention was an
agreement to establish terms, conditions and limitations of liability for
carriage by air, this was the first recognition of the airline industry as we
know it today.
By 1933 realising that there should be a specialist industry sector the
International Union of Marine Insurance set up an aviation committee, and by
1934 eight European aviation insurance companies and pools were formally
established and the International Union of Aviation Insurers was born.

The London insurance market is still the largest single centre for
aviation insurance. The market is made up of the traditional Lloyds of London
syndicates and numerous other traditional insurance markets. Throughout
the rest of the world there are national markets established in various
countries, this is dependent on the aviation activity within each country, the
US has a large percentage of the world's general aviation fleet and has a
large established market.
No single insurer has the resources to retain a risk the size of a major
airline, or even a substantial proportion of such a risk. The Catastrophic
nature of aviation insurance can be measured in the number of losses that
have cost insurers hundreds of millions of dollars (Aviation accidents and
incidents). Most airlines arrange "fleet policies" to cover all aircraft they own
or operate.

RISK COVERED IN AVIATION INSURANCE

There are different types of risk which takes place in aviation insurance
and those risks are covered in aviation insurance they are as follows:

AVAIATION INSURANCE

NORMAL RISKS
The

LIABILITIE
S

above diagram suggests that there are mainly two kinds of risks which an
aviation insurance company will cover which has been divided into two parts.
They are:
1. Normal Risks
2. Liabilities
These two risks are further divided into various parts which involve
various risks and liabilities they are which is explained in detail later on.

NORMAL RISKS
These risks are those risks which every aviation company in this
industry carries it on its back when it enters into the business. These risks
may differ from time to time and situation to situation. These are
1. Hull Risks
2. Hull War Risks
3. Spares All Risks/ War Risks
4. Hull total Loss Only cover
These risks are those risks which takes place when these takes place
when any of these factors comes into action. Because all the above risks
mentioned above are unpredictable and may occur at any time

HULL RISKS
The hull "All Risks" policy will usually refer to something like "all risks
of physical loss or damage to the aircraft from any cause except as
hereinafter excluded".
Airline hull "All Risks" policies are subject to a standard level of
deductible (that is an uninsured amount borne by the Insured) applicable in
the event of partial (non-total) loss. Currently, this deductible can range from
$50,000 in respect of a Twin Otter to $1,000,000 in respect of a wide-bodied
jet aircraft, such as a Boeing 747.
Deductibles too can be reduced by means of a separate "Deductible
Insurance" policy. The Deductible Insurance Policy is effected to reduce the
large "All Risks" policy deductibles to a more manageable level. For example
the US$1,000,000 applicable to a Boeing 747 can be reduced to say
US$100,000.
The term "all risks" can be misleading. "All risks of physical loss or
damage" does not include loss of use, delay, or consequential loss.
"Grounding" is a good example of consequential loss. Some years ago when
there had been a couple of accidents involving DC10 Aircraft, the Civil
Aviation Authorities throughout the world imposed a "grounding order" on
that type of aircraft.

That order in effect said until certain things had been established and
checked out those aircraft could not fly. The operators of those aircraft were
unable to fly them and as a consequence of that they "lost" the use of them.
But the aircraft were not "lost" - it was known precisely where they were but
they could not be used to carry passengers. Such an eventuality would not
be covered by an "all risks" policy because in such circumstances there is no
PHYSICAL loss or damage.
What the policy will cover is the reinstatement of the aircraft to its
"pre-loss" condition, if repairable damage is involved, or some other form of
settlement in the event that more substantial damage is sustained. Exactly
what form of settlement will depend on the policy conditions.
Today, the vast majority of airline hull "all risks" policies are arranged on an
"Agreed Value Basis". This provides that the Insurers agree with the Insured,
for the policy period, the value of the aircraft and as such, in the event of
total loss, this Agreed Value is payable in full. Under an Agreed Value policy
the replacement option is deleted.

Concorde plane disaster in France, 25 July 2000

The hull risks does not cover some risks whish are as follows
1. Wear, tear and gradual deterioration - in common with most nonmarine policies (which includes aviation insurance) these perils are
thought to be a trading expense and not a peril to be insured.
2. Ingestion damage - caused by stones, grit, dust, sand, ice, etc.,
which result in progressive engine deterioration is also regarded as
"wear and tear and gradual deterioration", and as such is excluded.
Ingestion damage caused by a single recorded incident (such as
ingestion of a flock of birds) where the engine or engines concerned
have to shut down is not regarded as wear and tear and is covered
subject to the applicable policy deductible.
9

3. Mechanical Breakdown - likewise is thought by aviation insurers to

be an operating expense, but subsequent damage outside the unit
concerned is usually covered. However, it is possible to obtain
insurance coverage against mechanical breakdown of engines by
way of a separate policy. This coverage has a high degree of
exposure and as a result is relatively expensive. The majority of
airlines do not purchase it probably viewing such exposure as a part
of the "engineering"

HULL WAR RISKS

10

The hull "All Risks" policy will contain the exclusion of "War and Allied
Perils". Generally speaking, throughout the aviation insurance world, "War
and Allied Perils" have a defined meaning. In the London Aviation Insurance
Market the standard exclusion is called the War, Hi-jacking and Other Perils
Exclusion Clause (currently known by its reference - AVN48B for short) this
lists and defines these so-called war and allied perils. It say,
1. War - this includes civil war and war with no formal declaration.
2. The detonation of a weapon
3. Strikes, riots, civil commotions and labour disturbances.
4. Political or terrorist acts.
5. Malicious or sabotage acts.
6. Confiscation, nationalization, requisition and the like by any
government.
7. 7.Hijacking or Unlawful exercise to control plane other than
crew members of the flight concerned.

11

The brutal second plane crash in World Trade Center, New York, United States of Ameica,
11 September,2001

12

The exclusion also applies to any loss or damage occurring whilst the
aircraft is outside the control of the operator by reason of any of these "war"
perils.
The majority of the excluded "War and Allied Perils", other than the
detonation of a nuclear weapon and a war between the Great Powers (the
aviation insurance world identifies these as the U.S.A., the Russian
Federation, China, France and the UK), can normally be covered by way of a
separate "War and Allied Perils" policy. Aircraft deductibles are not normally
applied in respect of losses arising out of "War and Allied Perils".
Other exclusions insurers will usually apply are, as follows:1. Confiscation etc. by the "state" of registration (this exclusion can often
be deleted in respect of financial interests - albeit, in some instances at
an additional premium charge)
2. Any debt, failure to provide bond or security or any other financial
cause under court order or otherwise;
3. The repossession or attempted repossession of the Aircraft either by
any title holder or arising out of any contractual agreement to which
any Insured protected under the policy may be party;
4. Delay and loss of use. (Although there is often an extension to the
policy for a limited amount for extra expenses necessarily incurred
following confiscation or hijacking).
The aircraft hull "War and Allied Perils" policy will cover the aircraft on
an "Agreed Value" basis against physical loss or damage to the aircraft
occasioned by any of these perils. This statement is made carefully and
deliberately in order to highlight the essential difference from a "Political
Risks" Insurance.

13

SPARES ALL RISKS

First of all we must identify what we mean by a "spare" or perhaps "when is a spare not a spare" to which a simple answer is "when it is
attached". Under most "Hull" policies the word "Aircraft" means Hulls,
machinery, instruments and the entire equipment of the aircraft
(including parts removed but not replaced). Once a part is replaced it is
no longer, from an insurance viewpoint, part of the aircraft. Conversely once
a spare part is attached to an aircraft as a part of that aircraft (not in the
hold as cargo or on the wing as an extra pod) it is no longer a "spare".
If the equipment is insured on the hull "All Risks" policy the automatic
transfer of coverage from "aircraft" to "spare" and vice versa is automatically
accomplished.
Having established when a spare is a spare how is it insured as such?
Usually in one of two ways. Either under a "spares" section of a hull policy or
by a separate Spares Policy. In either case the scope of coverage will
probably be similar. All Risks whilst on the Ground and in Transit for a limit of
[so much] any one item or sending or any one location. War Risks can also
be covered (in respect of transits), Strikes, Riots, Civil Commotions can be
covered in accordance with standard market clauses. Spares coverage is
usually subject to a small deductible except, however, in respect of ground
running of spare engines when the appropriate Ingestion deductible will be
applied. Spares are normally covered on an agreed value basis - usually their
replacement cost (be it new or reconditioned - as is required).

14

A flight cockpit with its spare parts

An engine with its spare parts working

inside

Spares installed on any aircraft are not covered by the Spares

Insurance. They become, from an insurance standpoint, a part of the aircraft
upon which they are installed and a part of the Agreed Value for which it is
insured. This becomes particularly important if the parts are loaned to
another airline.

15

HULL TOTAL LOSS ONLY COVER

The Aerocor (Aerolineas Cordeillra) DC-3 used in 60s and 70s

This is similar to Hull All Risks cover given above but will respond only to
total losses of aircraft, whether actual, constructive or arranged. This is
particularly given for old aircraft since the old aircraft are heavily depreciated
and insured for low sums and premium on such low sums would result in low
premium, which would be inadequate for the partial losses. The ratio of
partial losses to total losses in such old aircraft is distorted.

LIABILITIES

16

Liabilities are those risks which may arise due to some consequences
or some reasons the company has to face. Those reasons are as
follows
1. Aircraft Liability
2. Excess Liability
3. Aerospace Manufacturers products and Grounding Liability
4. Airport Owners and Operations Liability
5. Product Liability
A liability is a present obligation of the enterprise arising from past
events, the settlement of which is expected to result in an outflow from the
enterprise of resources embodying economic benefits.
The explanations of all the liabilities are given below

AIRCRAFT LIABILITY

17

Here in aircraft liability there are many other liabilities involved which
are further divided into four parts. They are

AIRCRAFT LIABILITY
3RD PARTY

PASSENGE
R
BAGGAGE

CARGO
AND
MAIL

These are the kinds of liabilities which are covered in aviation insurance
the explanation in detail is given below

18

PASSENGER LIABILITY

Coverage

for

aircraft operators in
the

event

passenger is injured,

Passengers injured in 'Turkish Airlines Plane Crash in

Netherlands' Feb 25, 2009

killed

or

disabled

during

an

accident

while

aboard

an

insured

aircraft.

Aviation

policies

divided

liability

coverage

into

two

parts--general liability (excluding passengers), and passenger liability.

A Passenger Liability policy covers incidents resulting from the transportation
of passengers by land, sea or air and can often be included as part of a
aviation insurance policy.
However care must be taken to check that the motor policy wording does not
exclude fare-paying passengers, which is often the case. It is unlikely that an
underwriter will be prepared to cancel or amend the wording of a standard
motor vehicle policy.
For this reason Daily Cover policies are specifically for to cater for farepaying passenger liability.

19

THIRD PARTY LIABILITY

This program offers 3rd Party Liability insurance coverage for noncommercial operations only. Pilot and passenger injuries and aircraft physical
damage are not covered. This member benefit program is designed to allow
non-commercial pilots the benefits that insurance coverage can offer.
While pilot and passenger injuries and damage to the aircraft itself are
not covered under a Third Party program, financial responsibilities bodily
injury or property damage caused by the aircraft for which the pilot is found
to be legally liable to pay to others is covered. Additional insured parties
such as landowners, municipalities and airports, can also be covered under
this type of policy. Because the possession of Third Party coverage provides
landowners with a Certificate of Insurance showing that coverage is in place,
access to more flying sites are accessible for the operation of your aircraft

20

Concorde crash on a hotel near Paris Airport just few minutes after the take off which
resulted in destruction of th hotel it fell on, 25 July, 2000

When one engages in recreational activities requiring the use of a vehicle whether it be land, water, or air sports related - there are inherent factors
that could result in liability issues. No one wants to enjoy an activity and then
have the pleasure of it clouded with possible situations that would result in
liability claims against their hard earned savings. This Third Party liability
insurance for USUA members can help relieve the worry of possible claims
against the pilot should this type of situation occur. Additionally, access to
airports, flight parks, and flying events often require liability coverage. Many
states require insurance of this nature just to operate an airplane of any
description. Third party liability coverage is also less expensive than full
coverage, and therefore allows the members (insurance holders) the

21

opportunity to enjoy the thrill of aviation without the worry of liability

concerns or the expense of high-priced insurance.
The people can be only eligible who are a registered, certificated or licensed
pilot are eligible. Sport Pilot Students who are endorsed to solo are also
eligible. Pilot registration can be with any recognized organization.

BAGGAGE LIABILITY

22

This kind of liability may include various reasons in the happening. They are
as follows:
1. Delays
If your bags are delayed, try not to panic. The airlines typically
have ways to track them, and about 98 percent of all misplaced luggage
is returned eventually. If your bags are on the next flight, you could have
them within a few hours. If they've been sent to the wrong airport, it could
take a couple of days. Make sure to file your claim immediately at the
airport and to give the attendant a hotel or home phone number and
address.

Passengers hit by baggage delay

The airlines will typically bring you your luggage when it is found; you will
rarely need to return to the airport to pick it up. Additionally, many
airlines will reimburse any unexpected expenses caused by the loss or
delay (keep your receipts!). But be careful here -- the airline sometimes
has the option to deduct any reimbursement or stipend from any
subsequent awards.

23

Before you leave the airport, be sure you know how to check on your
bag's status; some airlines have an online system while others will
provide you with a phone number to call for updates.
2. Lost Baggage
If the airline loses your bags, make sure you get a written claim for
damages. This may require a different form than the original "missing
luggage" form. This can be done at the airport or by mail.
On domestic flights, the airline baggage liability is capped at $3,300 per
person. On international trips, the liability limit may vary, as it is governed
by various international treaties, including the Montreal and Warsaw
Conventions.

You may
need to produce
receipts to prove
the value of items
you had in your
suitcase.
have

If

you
them,

include copies in
any
A place consisting lost baggages in airport

documentation
you send to the

airline. (Keep in mind that you will be reimbursed for the depreciated value
of your items -- so the airline won't give you the full $1,000 you paid for that
suit you purchased two years ago.) You can purchase "excess valuation"
protection if your checked baggage is worth more than these limits (but
24

before doing so, make sure the items aren't already covered by your
homeowner's or travel insurance policy).
The airlines typically have a long list of items for which they will not
be held responsible; these include jewelry, money, heirlooms and other
valuables. These sorts of items should always be packed in your carry-on
bag.

3. Stolen Baggage

Head directly to
the baggage carousel
when you get off your
flight.

Many

airlines

scan bags when they're

loaded

into

the

baggage claim area and

keep records, especially
Unclaimed baggage ready to be stolen

at larger airports. Once

you've left the baggage
claim area, your claim is
no longer with the airline,
but with the police.

4. Damaged Baggage

A damaged bag due to hush made by the airport workers

in the green belt

25

Once you've gotten your bags off the carousel, immediately check
them for damage or other signs of tampering or mishandling. Report any
damage before leaving the airport; airline customer service will often
want to inspect the bag. Keep in mind that most airlines won't cover
minor wear and tear.

CARGO AND MAIL

Consignment damaged while cargo or mail from one place to another

According to,

26

Although Martinair Cargo will give its best efforts to deliver your shipment at its
final destination in good order and condition, sometimes damage / depreciation,
delay or (partial) loss unfortunately occurs. In case such an irregularity should
affect your shipment, a claim can be filed with Martinair Cargo Claims. In order to
facilitate and speed up the claim handling process, we kindly would like to draw
your attention to the following:
I What to do in case you receive your shipment with damage
1

Make sure that the damage of the shipment is noted on the release

form/delivery receipt of the warehouse.

1

If possible, please take (digital) pictures of the damaged shipment

upon receipt of your cargo at the final destination, as recorded on the Airway
Bill.
1

To strengthen your case, you can appoint an independent and

objective surveyor. However kindly be advised that the decision to appoint a

surveyor is up to the claimant as the claimant always has to provide

27

independent evidence in order to prove the extent of the damage as claimed

for.
1

Send a written preliminary claim to Martinair Cargo Claims within 14

days from the date of delivery at the final destination.

Measure the temperature of the shipment upon release and measure

the boxes on the outside of the pallets in case of complete pallet delivery.
Please record the temperature on the release form/delivery receipt of the
warehouse.
1

To strengthen your case, you can appoint an independent and

objective surveyor to check the condition of your perishable shipment.

Please make sure that your shipment will be surveyed as soon as possible
but not later than 8 hours after arrival at your premises: perishables are
time sensitive and/or temperature sensitive commodities, therefore only a
survey done shortly after arrival of the cargo will be considered as an
objective survey.

28

II What to do in case of (partial) loss/pilferage of your shipment

Loss:
.
1

Definition: loss is defined as all pieces (mentioned on the Master Air

Waybill) reported missing

2
3

Send a preliminary claim to Martinair Cargo Claims within 120 days

from the date of issue of the Master Air Waybill.

Partial loss / pilferage:
1

Partial loss is defined as one or more pieces of the total shipment

(mentioned on the Master Air Waybill) are reported missing

2

Pilferage is defined as the loss of one or more items out of one or more

pieces
1

Send a preliminary claim to Martinair Cargo Claims within 14 days from

the date of delivery (both partial loss and pilferage are considered as
damage).
1

Make sure, that partial loss and/or pilferage is noted on the warehouse

release form/delivery receipt of the warehouse or on the Trucking document

in case of direct deliveries. In case of pilferage, please also establish the
weight discrepancy.
III How to file a priced claim
Whenever a priced claim is filed, the necessary information must be gathered. We
strongly request you to enclose the relevant documentation and information as
mentioned below, in the English language:
1

Vendors / shippers invoice covering the complete shipment.

Please explicitly indicate the items / pieces claimed for. Please note that
Martinair Cargo cannot offer full compensation based on the commercial /

29

sales invoice as a refund for loss of profit is not part of our contractual
liability.
2

Packing list. Please indicate the items / pieces claimed for Cession

of Rights, if required, from the party (shipper / consignee as mentioned of

the Master Air Waybill) entitled to claim, which states that your company is
authorized to act on their behalf.
3
4 Copy of the Martinair Master Air Waybill (and if possible a copy of
the relevant House Air Waybill).
5
A specification of the amount claimed for (by means of a shippers
invoice, an independent survey report, a bill of sale or a bill of repair).
1

Copy of the delivery receipt.

(digital) Pictures, if available.

Your banking details, including swift code.

In case your claim concerns damage / depreciation, please enable us to verify the
extent / direct consequences of the irregularity by also enclosing:
1

Independent and objective survey report, if issued. In case the

amount of the damage / depreciation is expected to be below the costs

involved in employing a surveyor, a survey report obviously is not required.
Please note that the decision whether or not to involve a surveyor is entirely
yours. The presence of an objective survey report, however, will never
reduce the strength of your case.
2

Destruction report, in case the shipment was no longer fit for sale.

3
4

Bill (s) of sale, in case the shipment was still fit for sale.

5
6

Bill (s) of repair (if applicable).

30

Only upon receipt of the information as requested above, your claim can be taken
into consideration. If any of these documents are not available, please explicitly
state so. Please be informed that an adequate and sufficient provision of all
relevant documents enables a swift and efficient claim handling procedure.
IV Claims handling information
1

Claims will be handled in accordance with the applicable Conventions

and /or General Conditions and / or Conditions of Contract.

1

An airline can only be held responsible for proven irregularities which

can be held against the carrier and which occurred while being under its
custody. This means the period from acceptance of the shipment at the
airport of departure until delivery at the airport of destination.
1

A preliminary notice of claim must be made in writing by separate

notice. In case of damage (also including partial loss and pilferage) a

(preliminary) notice of claim must be filed within 14 days from the date of
receipt of the cargo. In case of loss (all pieces reported missing) a
(preliminary) notice of claim must be filed within 120 days from the date of
issue of the Mawb.
1

The maximum liability of Martinair Cargo is limited. We refer to the

relevant provisions of the Warsaw / Montreal Convention, as well as to our

General

Conditions

(available

on

the

website

of

Martinair

Cargo:

www.martinaircargo.com) and our Conditions of Contract. As a consequence

hereof, we politely advise you to file a claim with your (clients) underwriters
in first instance, in case your shipment is covered by an insurance policy.
1

For a number of irregularities Martinair Cargo is protected by an

exclusion of all liability. For example: the damage as claimed for is of an

indirect / consequential nature ( e.g. loss of profits, additional taxes incurred,

31

fines etc.), Act of God , Force Majeure situation, authority regulations.

Reference is made to our General Conditions. Martinair also will decline all
liability for goods not properly packed for air transportation.

Martinair Cargo does not accept liability for perishable cargo delivered
into our custody at a temperature exceeding the temperature limits
mentioned on the warehouse receipt / acceptance slip or exceeding the
temperature limits mentioned in the IATA, Perishable Cargo Manual. Also
liability is not accepted by Martinair Cargo for damages which are a result of
inherent defect, nature or vice of the cargo whilst shipment has not suffered
a significant delay.
1

The right to claim shall be extinguished if any action is not brought

within two years, reckoned from the date of arrival at the destination, or
from the date on which the aircraft ought to have arrived, or from the date
on which the carriage was stopped.
1

Whenever our liability for a claim exceeds our policy deductible,

Martinair Cargo will be forced to hand over the file to the liability claims
adjusters appointed by our insurers. The claim will then be dealt with directly
by these claims adjusters and the claimants will be contacted accordingly.
1

In case we accept liability we request the claimant to sign and to

stamp a Final Release Form before being able to settle, hence relieving
Martinair Cargo from any further future liability. After receipt of the duly
signed and stamped Final Release Form and if necessary the Cession of
Rights, settlement will be effected. Our financial department will transfer the
amount to your bank account, for which we of course need your banking
details, including swift code.

32

EXCESS LIABILITY

33

Excess liability is all about the refueling and the defueling of the aircraft.
Excess liability is also known as THIRD PARTY WAR RISKS.

Refueling done by 1 aircraft to another in air

Refueling done on ground

34

AEROSPACE MANUFACTURERS PRODUCTS AND GROUNDING

LIABILITY
MANUFACTURERS PRODUCTS LIABILITIES

This type of insurance is essential for the manufacturer of aircrafts,

its components and related equipment. In addition, it is also necessary for
those engaged in selling airplanes, its parts or fuel, and for individuals who
repair and/or maintain the aircrafts.
There are different laws, federal regulations and considerations for
commercial airliners versus small planes.
General aviation refers to aircraft such as small planes that seat less
than 20 passengers and were not engaged at the time of the flight in
scheduled passenger-carrying operations. It includes helicopters, as well.
Knowledgeable brokers can assist in the process of identifying what type
of coverage is necessary on a case by case basis.

35

Wings of the plane made of Aluminum

Lifeline of an aircraft- Big 1.5 storey size engines

Coverage
This policy protects parties from claims arising from injury or
damage caused by defects in the products sold or manufactured or from
improperly completed operations. Manufacturers, distributors and sellers
can be open to liability even if it is proven that the product was used
improperly. Insurance coverage will cover their legal fees needed for
defense against claims and class action suits

36

Three times big tyres of a plane

Statistics
Though air traffic is considered to be a safe means of
transportation, accidents do occur. Some of the more common causes of
many of these incidents are faulty equipment and structural or design
problems.

Aviation products can cause catastrophic accidents as the

result of relatively minor failures.

GROUNDING LIABILITIES

37

This may include liabilities as follows

PREMISES-LIABILITY
This basic part of the policy will protect the liability of the operation for the
employees while performing their duties. This would be the fueling operation,
and any part of the business associated with the office and ramp areas. The
facility will add to this policy additional parts to cover the specific needs of
each operation.

Ground staff at its work

HANGARKEEPERS
The larger operations, you know, like a Bell service center with 8 to 10
beautiful ships in various stages of maintenance with full pilot training
38

facilities for instance, is almost always going to have exceptional policies

covering their business operations that include what you do. Their policy will
cover any person acting on behalf of the operation in the carrying out of their
duties. This policy will protect you if you should do something unintentional
that causes damage. An example might be in the process of moving a helo in
or out of the hangar with a power tug. If you are watching one side and start
the turn too soon and catch the tail boom or rotor on the hangar door or
another helicopter sitting next to the one you are moving, the damage you
cause will be covered by the operations Hangarkeepers coverage.
Now lets say you work for a maintenance only shop with just 1or 2 ships
being worked on at any one time. In these difficult economic times, it is not
unheard of for some operations to trim expenses and not purchase the
Hangarkeepers option of the policy. If you are unsure, work up the courage to
ask your boss if you are covered under this part of the policy. Seeing a copy
of the declarations page with the policy effective dates will help reassure you
and will also tell you if the coverage has been purchased.

39
People working as hangar keepers

TRAINING

A pilot getting trained in a cockpit

It is the hope of the insurance underwriters that if you are asked to do

something new that you will have received training ahead of time. If you
usually move a Robinson R22 or Schweizer 300 and are now asked to move a
multi-million dollar Sikorsky S-61, please be sure you ask for training or
assistance. This same training will apply to any part of the operation you
perform. Even something that seems as simple as fueling or de-fueling must
be part of your training before you perform it by yourself. Underwriters would
prefer the operation participate in NATAs Safety
40

IN-FLIGHT-HANGARKEEPERS
This coverage is important if you are operating the helicopter in flight. It is
not uncommon for an operation to do a test flight after maintenance has
been performed or if avionics have been installed or changed. Sometimes a
problem reported by the owner can only be replicated while in flight. If you
are the one who flies it, be sure you meet all of the pilot requirements of
both the operators policy and the helicopter ownerspolicy.
In almost every case, an owner will have an aircraft policy that has as part of
their pilot warranty a paragraph that states what qualifications a pilot needs
to meet before he can fly as part of a maintenance flight. There are some
operators who believe that the owners policy will cover any damage that
results from a loss to the aircraft while flying under this provision. Remember
that the owner
has a policy to
protect
not

them;

you.

If

there is a loss,
they
the

will

get

aircraft

repaired; but if
the

loss

was

the fault of the

pilot and not
the

ship,

the

company may
Eligible pilots

take

the

opportunity to subrogate the loss back to the repair shop.

41

AIRPORTS OWNERS AND OPERATIONS LIABILITY

AIRPORT OWNERS LIABILITY

The work done by airport employees is considered to involve the greatest

level of professional responsibility. Even smallest errors by airport personnel
can result in enormous casualties and material losses. Therefore it is
important for airport owners to insure not only their property but also thirdparty liability.
Insurance objects:

The Insureds liability as an airport owners and/or airport structures

that may include:

- airport terminal, airfield and other infrastructure;

- fuelling station;

- air traffic control center.

Insurance risks:

- liability for causing material damage to third parties;

- liability for causing damage to life and health of third

parties.

42

Beautifully built Riyadh Airport

Insurance period:

Period specified in the insurance policy normally one year.

The cost of insurance is influenced by:

- number of takeoff and landing operations;

- types of aircraft based at the airport;

- passenger and freight flow volumes;

43

- structures comprising the airport;

- security measures;

- working conditions of air traffic control center.

Exclusions:

Standard: military risks; risks related to nuclear explosion effects and

radiation hazard.

Specific:

liability to the Insureds personnel;

- liability for property owned or temporarily possessed by the

Insured;

- liability for injuries to persons and property resulting unless

such activities have been agreed on with the Insurer.

Also to mention that airport owners liability also includes operations

liabilties

PRODUCT LIABILITY

44

Product liability is the area of law in which manufacturers,

distributors, suppliers, retailers, and others who make products available to
the public are held responsible for the injuries those products cause.

Theories of liability
In the United States, the claims most commonly associated with product
liability are negligence, strict liability, breach of warranty, and various
consumer protection claims. The majority of product liability laws are
determined at the state level and vary widely from state to state. Each type
of product liability claim requires different elements to be proven to present
a successful claim.

Plane crash due to manufactures and other members related with the airlines

Types of liability

45

Section 2 of the Restatement (Third) of Torts: Products Liability distinguishes

between three major types of product liability claims:

manufacturing defect,

design defect,

a failure to warn (also known as marketing defects).

Manufacturing defects are those that occur in the manufacturing process and
usually involve poor-quality materials or shoddy workmanship. Design
defects occur where the product design is inherently dangerous or useless
(and hence defective) no matter how carefully manufactured. Failure-to-warn
defects arise in products that carry inherent nonobvious dangers which could
be mitigated through adequate warnings to the user, and these dangers are
present regardless of how well the product is manufactured and designed for
its intended purpose.

FUTURE OF AVIATION INSURANCE

46

During the past century, man has realized his dream to fly. The aircraft
has been developed and partially perfected. The aviation industry, as it is
known today, has grown into a set of definable sub-industries based upon
usage. Modern-day aircraft range from military to commercial airlines to the
most diverse group, general aviation. As with any technology-based industry,
aviation continues to grow and develop. New uses for aircraft are identified,
better aircraft and avionics are created, and problems are recognized and
solved.
Although aviation has come a long way in the last 100 years, it is still a
developing industry. With growth and development come problems that must
be solved before an industry can graduate to the next level. In the United
States, aviation is now being confronted with a series of problems that may
take as long to solve as the act of flight itself. As aviation enters the new
millennium, it is these problems with which the aviation insurance industry
must deal. Some are simply growing pains. Others are outside influences for
which no simple solution may exist.
Legal Concerns
In many cases, changes in other areas of our society have a great
influence over aviation. This is the case with our court system. The trend
toward unreasonable verdicts and ridiculous awards has forced many aircraft
owners to create shell corporations to "front" as the registered owner of their
aircraft. Owners today are uncertain as to how much liability insurance is
adequate protection, a situation made far worse by the growing reluctance of
insurance underwriters to offer higher limits of liability protection at any
price. The underwriters explain that it is impossible for any aviation
insurance company to predict an adequate liability premium rating structure
when the court decisions are so volatile and erratic. All aviation insurance
companies are heavily reinsured by companies in London and other foreign
markets, and those foreign insurers usually charge passenger liability
47

premiums for aircraft operated in the United States that are three to five
times as much as those paid by non-U.S. operators.
And so it goes for the owner of general aviation and commercial aviation
aircraft in the United States. Aircraft owners seem to be trapped between
inadequate coverage limits, high-priced liability insurance premiums, and the
perils of the U.S. court system.
Can Small Aviation Businesses Survive?
In the future, some sectors of the aviation community may simply
cease to exist as a result of the threat of financial devastation due to lawsuit.
We've had a glimpse of this already when the escalating cost of products
liability insurance practically stopped the production of light aircraft in the
mid-1980s. It was only after a change in legislation limiting the time an
aircraft manufacturer could be held responsible for products liability that our
industry resumed production of new light aircraft.
In the future, such sectors of general aviation as the small piston repair
shop and the small flight training school may not be able to afford the
increasing insurance premiums and in some cases may not be able to buy
adequate insurance at any price. This may spell the end for many in these
businesses. As of February 2000 at least three aviation insurance companies
have ceased writing small "Instruction and Rental" risks while others have
increased their premiums for this class.
The future may see the small maintenance facility replaced with a newtechnology aircraft requiring far less maintenance. The same style of
maintenance used by the military and airlines -- the remove-and-replace
concept -- may become commonplace throughout general aviation as well.
Maintenance problems may be identified by computer and repaired only by
the manufacturer at factory service centers, a practice that is already

48

common in today's bizjet fleet. "Plug and fly" replacement parts keyed to a
computer analysis may decrease cost with little or no downtime.
All this, of course, is little consolation to owners of existing, oldertechnology,

maintenance-intensive

aircraft.

They're

not

getting

any

younger ... and neither are we.

Aging Fleet, Aging Pilots
While aviation is not exactly a mature industry, it is aging. Maybe what
we're seeing today is just the end of a plateau in the overall development of
aviation. The average age of both our pilot population and our fleet (both
commercial and general aviation) is increasing. Many commercial and airline
pilots today received their initial training in the military. The World War II
pilots are now in their 70s and 80s, the Korean War pilots are in their late
60s, and the Vietnam pilots are in their 50s and 60s. One of the most
common conversations we have with our clients and friends concerns how
they can extend their insurable years as a pilot. Aviation is a great hobby for
our retirement years.
Aircraft hull and liability insurance for the senior pilot has become such
a concern that our insurance agency has developed a special task force to
help deal with this problem. Looking into the future, as the baby boomers
age, our average pilot populations continue to age. As with automobile
drivers, we have found this segment of our industry to be no more likely to
have an accident than the younger group. In fact, they tend to be more
cautious, better trained, and better financed than most underwriters care to
admit. Maybe it is because we are growing older ourselves, but we believe
increased awareness at the underwriting level will soon improve insurance
company acceptance and serve to extend the insurable age of the senior
pilot. We can assure you, we are doing everything in our power to influence
the underwriting community in that direction.

49

Meantime, what can be done to infuse new blood in the cockpit? The
industry is currently suffering from a lack of trained professional pilots.
Without the military-trained pilot to help fill the need for commercial and
airline pilots, we must depend solely upon civilian-trained pilots. This then
becomes an economic problem. There is no longer a generous GI Bill to offset
the cost of flight training in an age of escalating costs.
Many of our charter and corporate clients complain of sending a young
second-in-command to school on their aircraft, only to have the airlines snap
them up upon completion. The trend toward younger and younger pilots in
the right seat is disturbing whether at the charter, corporate, or airline level
of operation.
Shrinking Fleet
Primary training costs are increasing for a number of reasons. The high
cost of new replacement training aircraft and inadequate and expensive
insurance render the training sector of aviation vulnerable to lawsuits and
financial disaster, and a shortage of qualified instructors has slowed the flow
of new pilots to a trickle. The shortage of career CFIs is due in part to the low
pay scale at most flight schools, whose owners respond that they're just
barely able to stay in business as it is.
The majority of the general aviation aircraft flying today are 15 to 20
years old and older. To replace a simple single-engine Cessna 172 today
would cost in excess of $140,000. A new twin-engine Beech Baron is in the
$1,000,000 range. Of course, used aircraft are always an option. The obvious
problem is that as new replacement aircraft increase in cost, the price of
good used aircraft is forced up as well. Today, there are no bargains. It is
often a struggle to find a used aircraft for sale with no damage history.
Couple the normal attrition of our aging fleet with the high cost of

50

replacement aircraft and it is easy to understand why our overall general

aviation numbers are plummeting.
Again, a look into the future suggests that the majority of primary
training will be done in flight simulators and computerized flight-training
devices. As demand increases and technology advances, the full-motion
simulator should become much more affordable and so realistic the only
thing left for the student pilot is the checkride. "Safe and inexpensive" will
become the name of the game.
If you want proof, the military has already adopted this method of
training from the combat tank to aircraft and everything in between, and
airline pilots are getting type-rated in new transport jets without having ever
set foot in the actual aircraft.
Trend Toward Turbines
The current trend for corporate-owned-and-operated aircraft seems to
be toward turbine-powered aircraft. If new Barons sell for "a million bucks"
out of the factory and a good used King Air is also in the $1 million range, the
decision is clear to many which is the preferable aircraft in size, safety and
maintenance cost. The myth that a light piston twin is easier to fly than a
turbine-powered aircraft is beginning to be dispelled. Now that the
underwriting community is imposing virtually the same training requirements
upon the multi-engine piston pilot as the turbine operator, there is less
advantage in buying the piston-powered aircraft. Couple the ease of
operation of the turboprop and jet aircraft with the comparable cost of
acquisition, and you have an even more compelling argument against the
piston engine.
The proof is in the requests our agency receives for insurance quotations.
We are seeing increasing momentum toward turbine and jet aircraft. For

51

years, the corporate flight department has insisted upon the business jet for
comfort and safety. Now, with the development of the single-pilot jets, there
is increased interest from the businessman pilot in Citation SPs, CitationJets,
and other new-generation Williams-engine-powered jets. In our opinion, this
is clearly a look into the future. With the ease of operation and safety and
the decreasing acquisition and operational costs of new-generation turbine
aircraft, it is easy to see what the near future holds for the piston-powered
aircraft. Coupled with the increasing profitability of medium and large
businesses and their ability to afford private aircraft, and the frustrations of
flying the commercial airlines, we believe that the trend toward the small
corporate jet will escalate.
Training: Better But More Expensive?
There is no argument among most commercial pilots and aviation
insurance underwriters that full-motion flight simulators should be a part of
every

training

process.

You

simply

cannot

practice

the

emergency

procedures in the aircraft that can be demonstrated in a simulator. Although

not available for every aircraft at this time, more and more underwriters are
requiring simulator-based training at least annually. We get the complaint
from many of our clients that the cost to attend FlightSafety or Simcom is too
high. Usually, they do not take into account the cost of aircraft operation
when comparing this with the traditional in-aircraft flight training.
There is good news ahead, however. There is more competition in the upperlevel flight training area. With increased competition will come improved
programs and improved affordability. There will be more flight simulators
available for a wider variety of aircraft. In the future, we predict there will be
full-motion simulator-based training at every level ... yes, even for primary
training. You may see a pilot solo without ever leaving the ground. This is an
insurance underwriter's dream!

52

What Does The Future Hold?

We have no idea what can or should be done about the U.S. court
system with its irrational verdicts and out-of-control damage awards. From
this standpoint, aircraft owners and operators will continue to be plagued by
high liability insurance premiums and inadequate limits. We can only hope
that society will wake up at some point, change its attitude toward litigation,
and break loose from the hold that attitude has over all of us.
Of course, adversity is the mother of innovation (and invention). With this in
mind, the future is very bright. New methods of training using simulators at
all levels will produce more, better-trained pilots. As these techniques
become more available, the costs will continue to decrease. Some of the
new-generation flight simulation software for home PCs is quite spectacular,
and CFIs tell us it offers excellent training value (although the FAA does not
yet recognize this fact). New technology and new production methods may
eventually bring down the cost of new aircraft ownership, and a younger,
more efficient fleet will be born. A modern fleet of this type should be less
expensive to repair and with the improved repair costs, insurance hull
premiums will also decline. In addition, these new-age improvements are
producing aircraft that are easier to handle and fly. Safety and comfort seem
to be a priority. As this permeates our fleet, accidents will surely decrease,
and insurance premiums will decline as well.
The advent of the computer is changing the way we live our lives, and the
cockpit is no exception. First seen in our navigational aids with the very
affordable GPS, the computer is revolutionizing the entire look and function
of our instrument panels. Tom Chappell, president of our agency, recently
attended the open house of one of our clients to view his new Lear 45. This
new-generation aircraft is truly an awakening. Sitting in the cockpit
wondering just what all the new pretty and colorful screens and dials were,
Tom felt as if he was viewing a piece of equipment from a future epoch. The
53

instrumentation, function and completeness of the panel were truly a look

into the future of general aviation. The way pilots are trained in the future
will be changing -- not just to cut costs, but because the aircraft of the future
are here and are like nothing you have ever seen.

INDIAN GOVERNMENT ON AVIATION

INSURANCE
54

Indian Aviation Insurance Market Overview 2008 Anant Pawar*

The author is the Vice President & Head Aviation at Aon Global Insurance
Brokers Pvt. Ltd.
Insurers on aviation growth path Indian Insurers have come a long way
in developing the market capacity for aviation insurance business and as
Indias growth story continues, Insurers have kept pace with the growing
demand from buyers in India. Today the Indian market is playing a key role in
supporting not only buyers in India but also buyers in the sub-continent,
including major support to the SAARC region. As the Indian aviation industry
continues to grow, many new buyers have entered the insurance market with
requirement for different types of products. Apart from traditional airline and
aircraft related insurances, Insurers are now covering different verticals of
aviation industry ranging from airports to aircraft manufacturers with bigger
risks appetite. The year 2008 has seen heightened level of competition
amongst both Public and Private Sector Insurance Companies in an attempt
to retain the current market share and to fulfill an ever increasing desire to
participate in the aviation growth story.

55

MR.Praful Patel, Ministry of Civil Aviation, Union Government of India

56

This is more so in the General Aviation (generally aircraft with less than 61
seats) segment where the sum insured limits are within the capacities of
many Indian Insurers. General Aviation buyers in India have enjoyed
substantially lower premium payouts in 2008 compared to their world and
regional peers, as buyers have bargained hard taking advantage of the soft
market conditions and excess market quite a few buyers have switched their
insurers. On the Airline front, pricing continues to be driven by leading
international markets especially in London, as Indian Insurers continue to off
load major risks to international companies mainly in the European sub
continent, with insurance brokers playing a very important role in the entire
process. Market Potential For 2008, Aviations direct premium income in
India is circa INR 3,750 million and this includes buyers from all segments
including airlines, general aviation, aerospace, airports, ground handlers,
catering companies etc but excluding satellite. Over 75% of the total
premium comes from the airline segment with another 23% from General
Aviation. A very small portion of 2% is contributed by airport, ground
handlers, catering segment etc. In addition, capacity. In the process, National
Reinsurer, GIC Re writes substantial international aviation business (mainly
by way of inward reinsurance) coming into the country and gradually other
insurers are following suit, but with caution. Over the last 10 years GIC Re
has emerged as one of the largest aviation reinsurer in the international
market and is playing a key role in supporting Indian Insurers. Currently there
are over 200 buyers of aviation insurances in the country who need aviation
products in one form or other. Many new buyers have entered the market in
2008 and the trend is expected to continue in 2009 albeit at a slow pace. For
the airline sector, customer base and number of aircrafts has increased
significantly in the past three years but current economic situation is taking a
toll on its future growth.

57

When one compares the above limits to 2-3 years back it signifies a jump of
over 200%-250% and majority of the capacity comes from National
Reinsurer, GIC Re. New capacity has entered Indian market especially during
2007, 2008 with Private Insurers buying reinsurance programmes to support
their direct underwriting. At the same time existing Insurers have expanded
their underwriting limits.
It is expected that capacity will be more or less stable during 2009 and as a
result dependence on international market for General Aviation is likely to
get reduced, but for large airline risks reliance on international market is
expected to continue.

Three aviation giants

58

Claims Scenario
Each

Insurer

will

have

its

own

underwriting

experience to show and can vary from its peers considerably depending on
their participation on the policies that has produced losses. General Aviation
claims in 2008 are expected to exceed Rs. 500 million and 2009 has started
on a bad note with claims in first five months exceeding Rs.350 million. As
against this, past 10 years average general aviation losses are hovering
around Rs.400 million. When we compare these claim figures against the
total general aviation premium in India, one may come to a conclusion from
the insurers perspective that general aviation is profitable over the last 10
years period. This may not be true for all insurers, especially considering the
fact that 10 years average loss figure consists of two or three major losses in
each year. Insurers participating on these losses would have been hit hard.
Majority of the losses in the last 10 years are on account of aircraft damages
and liability claims forma a very small portion of it. However, by no means
does this give any indication into the future considering the catastrophic
nature of aviation business.

59

Montreal Convention
The Indian Government ratified Montreal Convention 1999 in March 2009
and currently it applies to international travel. There is nothing on record at
this stage to show that the revised liability limits are applicable to domestic
sectors. In brief, the Convention has increased compensation levels for
international passengers in the event of death or bodily injury and damage
and delay to the passenger baggage and cargo. While the compensation for
death or bodily injury has increased almost 7 times from the existing levels
of approximately USD 20,000 to around USD 140,000, the compensation for
damage to the checked baggage has increased from approximately USD 20
per kg to around USD 1,400 per passenger. The compensation for damage to
cargo has increased from USD 20 per kg approximately to USD 24 per kg.
The Warsaw System, which is in force in India by way of Carriage by Air Act,
1972 had allowed four choices of jurisdiction for filing of a claim by the
passenger, namely, place of issue of ticket, principle place of business of the
carrier, the place of destination of the passenger and the place of domicile of
the carrier. Through the Montreal Convention a fifth jurisdiction is added
which is the place of domicile of the passenger, provided the airline has a
presence there. Therefore an Indian would be able to file claim in India even
if the journey was undertaken outside India. Liability Limit for domestic
passengers in the event of death or bodily injury continues to be at the old
level of Rs.750,000 for passengers above 12 years of age and Rs.350,000 for
below 12 years. As regards damage and delay to the passenger, baggage
compensation is Rs.4,000 per passenger for hand baggage and Rs.450 per
kg for registered baggage. So far, Insurers have responded very positively by
covering their customers based on the revised limits for international travel
and it remains to be seen whether new limits will be applicable for domestic
travel as well and its impact on the liability claims scenario.

60

Aviation

Liability

Insurance

Limits

in

India:

Western European countries including countries in the Far East namely Hong
Kong, Singapore have adopted regulations specifying minimum liability
insurance limits for aircraft based on the maximum take off weight of the
aircraft and passenger seating capacity, however India is yet to adopt any
such regulations. Even neighboring countries like Sri Lanka and Nepal have
minimum liability insurance requirements for aircraft and it may not be too
long before India adopts such requirements. While Airlines and Corporate Jet
owners are buying liability limits in line with the international trend, there is
no similar trend when it comes to helicopter operators. Like Airline policies,
liability limits on Corporate Jets many times are driven by financing
/purchase agreements; however helicopter operators tend to buy low limits

61

AVIATION INSURANCE SERVICE PROVIDERS IN INDIA- NEW INDIA LIFE

ASSURANCE CO. LTD

In India the one

company which provides
aviation insurance as a
service is New India Life
Assurance Co. LTD
This company provides
this

service

commercial
the

product

aviation

Started

in

as

a
to

sector.
1946

as

Aviation Insurance of Air

India, company provides
professional
The logo of THE NEW INDIA LIFE ASSURANCE

insurance

aviation
advice

and

solutions to the needs of

small aircraft operators
as well as scheduled airlines.

The aviation portfolio encompasses following type of covers.

Hull All Risk Insurance Policy: This policy is suitable for small
aircraft operators belonging to flying clubs, companies engaged in
agricultural spraying operations, aircrafts especially designed for
VVIPs, business executives and for those engaged in industrial aids.
The policy scope includes all physical loss or damage sustained by

62

the insured aircraft including total loss, disappearance. All losses are
paid subject to deductibles.

Spares All Risk Insurance Policy: Covers loss or damage to

spares, tools, equipments and supplies owned by the insured or the
property for which the insured is responsible whilst on ground or in
transit by land, sea, air including in own aircraft or whilst on the
premises of others for storage only.

Hull/Spares War Risk Insurance: Indemnity is provided to the

aircraft as well as spares caused by war, invasion, acts of foreign
enemies, hostilities, civil war, rebellion, revolution, resurrection,
martial law, strikes, riots, civil commotion, malicious acts, sabotage.

Hull Deductible Insurance: Airlines at times have to bear a

proportion of loss due to application of a deductible under All Risk
Policy, which may impose considerable financial difficulty on the
insured. Therefore the operators insure part of their deductibles
under this kind of insurance.

Aviation Personal Accident (crew member) Insurance: This

cover is designed to cover insured person against injury, disablement
or death arising as result of an accident that is generally granted on
annual basis. The cover operates while mounting or dismounting
from and whilst traveling an aircraft while the aircraft is being used
within the geographical scope as per its permitted usage. This cover
can also be on 24 hours basis. The capital sum insured varies
according to the status of the insured or earning capacity and fixed
by the insurers.

Loss of License Insurance: Operating crews of the aircraft are

required to have valid license. License is liable to be suspended
either temporarily or permanently on medical grounds. Consequential
financial loss is covered by the loss of license policy. Cover provided

63

is in respect of incapacity causing permanent total disablement or

temporary total disablement due to bodily injury or illness.
Besides the aforesaid general aviation policies New India Assurance
Company also provides various other tailor-made insurance as per specific
requirements of the insured.
Claims: In case of claims following are illustrative documents that are
generally called for from the insured.

Documents in connection with aircraft details

Documents in connection with flight details

Documents in connection with the accident

Certificate of airworthiness/registration

Crew details

Maintenance & engineering information

Operational manual passenger documentation in case of claims

FORMS PROVIDED BY THE COMPANY REGARDING

AVIATION INSURANCE
64

There are basically three types of forms provided by the company regarding
aviation insurance. They are as follows:
1. Personal Accident Insurance Forms
2. Aircraft/ Aviation Liability Insurance Forms
3. Loss of Flying License Insurance Forms

All the forms are different from each other and also the columns to be filled.
In other words they differ from each other.
They look as follows:

65

The New India Assurance Company Limited

Registered & Head Office: New India Assurance, 87, M.G. Road, Fort, Mumbai - 400 001.

Declaration Form for Aviation Personal Accident Policy For Crew Members
(To be completed by each person to be insured and to form part of the Aviation Personal
Accident Proposal Form)
1. Name

2. Age till last birthday

3. What is the exact nature of your duties

4. If you are pilot or navigator or flight

engineer state
a. Number and type of license
b. Date of license
c. By whom granted
d. Date of expiry of license
e. Type/s of aircraft in respect of
which the license is granted
f. Date of last medical examination
for the license

:
:
:
:
:
:

5. Has your license been suspended or

withdrawn or have you ever been charged
with any offence under the air navigation
regulations?
:
If so, give details
:
6.

Give details of your flying experience

7. Have you been involved in any aviation

accident during the last 5 years?
If so, give details of each accident

Aircraft

Total No. of Hours Flown

:
:

8. Have you made any claim during the last

5 years under an Aviation Personal
Accident Policy
:
If so, give details of each claim
:
9. Has any insurance company at any time,
a. Declined your proposal for aviation
P.A. Policy or Life Insurance
:

66

b. Required an increased premium or

imposed special conditions?
:
c. Cancelled or refused to renew
your insurance?
:
If answer to a, b or c is yes,
Please give details
:

10. What are the types of aircraft you

contemplate flying?

I, the undersigned, hereby declare that all the above particulars are true and complete in
every respect, that I am in good health and free from physical infirmity or defect of any
kind, that I am and always have been of temperate habits, and that I have not withheld or
suppressed any information regarding the proposal.

Place:
Date:

Agency

(Signature of the person to be insured)

Policy No.

67

Proposal Form for Aviation Personal Accident Policy

(For pilots, navigators, aircraft flight engineers, aircraft flight technicians & other crew
members)
1. Proposers Name in full

2. Proposers Address

3. Proposers business or occupation :

4. Persons to be insured
(A declaration form in the prescribed format should be completed by each person to be
insured and attached to this proposal)
SL.
No.

Name

Age last
Birthday
(In years)

Designation/ Capital
Occupation Sum Insured
(Rs.)

5. Period of Insurance From

To

:
:

6. Nature of flying to be done

7. Geographical limits to which

flying will be confined

Table of
Benefits

8. Has any of the persons to be insured,

to your knowledge, any physical
defect or infirmity of any kind?
:
9. Has any insurance company at any time,
a. Declined your proposal?
:
b. Required an increased premium
or imposed special conditions? :
c. Cancelled or refused to renew
your insurance?
:
10. Has any aircraft owned or operated
by you ever met with an accident

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involving injuries to passengers

and/or crew members?
11. Is the insurance to apply on
24 hours basis, or to apply to
flying risks only?

12. The proposer may, at his option complete this column.

If the proposer is also the insured person, this column should be completed.
I, ____________________________________do hereby assigns the monies payable by
The New India Assurance Company Limited in the event of insured persons death to
_______________________________, ___________________(relationship to the
insured) and I declare that his/her receipt shall be sufficient discharge to the company.

(Signature of the
Insured)
Witness

Signature of the witness:

Name of the witness
Address of the witness

:
:

I/We hereby declare that the above statements are true and complete. I/We agree that this
proposal and declaration form (signed by the person/persons) to be insured) shall be the basis
of
the contract between me/us and the insurance company. I/We further agree to accept a policy
subject to the conditions stipulated therein by the insurance company.

Place:
Date:
Proposer)

(Signature of the

69

The New India Assurance Company Limited

Registered & Head Office: New India Assurance, 87, M.G. Road, Fort, Mumbai - 400 001.

Agency

Policy No.

PROPOSAL FORM POR AIRCRAFT AND/OR AVIATION LIABILITIES INSURANCE

(DEFINITE ANSWERS SHOULD BE GIVEN FOR ALL QUESTIONS. NO COLUMN SHOULD BE LEFT BLANK OR
COMPLETED WITH A '-' (DASH))

1. Proposer's name in full:

2. Proposer's address:
3. Proposer's business:
or occupation
4. Details of aircraft to be insured
Air Frame

Make, Type
& Series
No.

Year of
construction

Passenger Seating
Capacity
Licensed
Declared
for the
purpose of
this
insurance

Engines

Registration/
Identification
Marks

Number &
Date of
issue of
last
renewal of
C of A

Number
and Type

Maximum
All Up
weight of
aircraft in
kgs

5. Value of the aircraft

Year of
purchase

Price Paid
Rs.

Present value of the aircraft

with standard instruments
and equipment (Rs.)

Extra equipment and accessories

fitted to or carried in the aircraft
Details

Value

Total value of
the aircraft for
the purchase of
insurancee

70

6. Purpose for which the

aircraft will be used
7. Geographical limits for
which mover is required
8. Will aircraft be flown at night ?
9. By whom will the maintenance and
running repairs be carried out
10. (a) Where will the aircraft
usually be kept ?
(b) Is the aircraft normally
kept in a hanger ?
(c) If so, state type of
construction of hanger
11. Will the aircraft be taxied by persons other than licensed pilots or competent licensed
engineers?
12. Have you entered into any agreement with any party whereby liability is assumed or
denied in respect of the operations of the aircraft ?
If so, give details
13. Has any insurance company at any time,
(a) Declined your insurance proposal?
(b) Cancelled or refused to renew your policy?
(c) Required an increased premium or imposed any special condition?
If answer to (a) or (b) or (c) is Yes" Please give details,
14. Please state details of all accidents/losses during last 5 years.
Date of
Accident

Brief details of accident

Cost of estimate of
repairs to Aircraft
(Rs.)

Amount of liability claims incurred (Rs.)

Third Party

Passenger

15. Give details of pilot who will fly the aircraft.

Pilot

Pilot

Pilot

Name
Age
Types of aircraft flown
Flying experience
(in hours)
Total Day:
Total Night:

71

During last 3 months:

On type & make of
aircraft proposed for
insurance:
Current License
Date of expiry
Classification
Details of accidents, if
any, during last three
years

16.

Details of insurance required:

(A) SECTION 1 - LOSS OR DAMAGE TO THE AIRCRAFT
Whether cover required:
If so, risks to be covered:
(State "Flight", Taxying" "Ground" "Moored" as the case may be)
(B) SECTION II - THIRD PARTY LIABILITY
Whether cover required:
If so, Limit of Indemnity (any one accident):
(C) SECTION III PASSENGER LIABILITY
Whether cover required:
Limit of liability per passenger:
Whether cover required on 'Legal Liability" basis or "Admitted Liability
(voluntary settlement) basis:
Baggage Liability
Whether cover required:
Limit of Indemnity per passenger:

17. (a) Do you require Hull War Risks cover?

(b) If full Hull War Risks cover is not required, do you require limited coverage for
Malicious Damage/Strikes, Riots & Civil Commotion/ Sabotage/Hi-jacking ?
18. PERIOD OF INSURANCE

From___________________ To_______________

DECLARATION: I/We warrant that the abovementioned aircraft is/are my/our property,
and the statements and particulars given are true and that no material information has been
withheld or suppressed, and I/We agree that this proposal and declaration shall be
the basis of the contract between me/us and the Insurance Company and to accept a
policy subject to terms, conditions and exclusions prescribed therein.

Signature of the Proposer

72

The New India Assurance Company Limited

Registered & Head Office: New India Assurance, 87, M.G. Road, Fort, Mumbai - 400 001.

Proposal Form for Loss of Flying License

Insurance
Proposal No:

Policy No:

A. Surname:
Christian Names:
Address:

Date of Birth:

Occupation:

Flight Category:
Captain/Pilot:
First/Second Offer:
Navigation Officer:
Radio Officer:
Flight Engineer/Instructor/ Glider Instructor
(delete whichever is inappropriate)

What is your present total remuneration

from your above stated occupation?
B. Name and address of present Employer:

73

If freelance state: 1. Type of Employment anticipate and all remunerated occupation:

2. Type of flying during past 2 years e.g. Air Line, Crep-spraying, Helicopter etc
C.

Type and number of license:

By whom granted?
Date of Issue:
Date of last renewal:

(This must not be confused with the date of last medical examination of such renewal. The date
of actual renewal must be given)

D. State whether or not you already have a Loss of License Insurance Policy, (State
Yes or No. If Yes, state: a. With whom?
b. For what amount?
c. Date of expiry of the Insurance:
d. Particulars of Insurance required:
E. PARTICUALRS OF INSURANCE REQUIRED
a) For What Sum?
b) For What Period?

From

To

NOTE: This insurance may be invalidated by the existence of another Loss of License
insurance unless prior agreement is obtains from the "NEW INDIA ASSURANCE CO. LTD."
________________________________________________________________________
I hereby declare that to the best of my knowledge I have not sustained any personal injury
whatsoever and I am not at the present time and have not been at any time afflicted any
illness whatsoever (including temporary or otherwise of my physical aural or eye condition)
except as detailed below: I further declare that the certificate of validity forming part of my above mentioned License
has never been invalidated for any period, except as stated below: I warrant that the above statements and particulars are true and thereby agree that this
Declaration shall be held to be promissory and shall form the basis of the contract between
me and the New India Assurance co. Ltd. and I am willing to accept a policy subject to the
terms, exceptions and condition prescribed by the Company therein, and to pay the
premium thereon.
DATE_______20
PROPOSER'S SIGNATURE:
_________________________________________________________________________

WARNING TO ALL PROPOSERS

In your own interest great care must be taken in completing the declaration set out
above. Non disclosure or incomplete disclosure of any fact which is or may be material to

74

the New India Assurance Co. Ltd. in deciding whether to accept your proposal for insurance
may invalid to the policy and cause you to be deprived of all benefits thereunder.
THE NEW INDIA ASSURNACE COMPANY LIMITED reserves the right to impose special
conditions or refuse to accept a proposal form.
________________________________________________________________________

SPACE FOR MEDICAL HISTORY

(IF NIL, State NIL)
(State all illnesses of whatsoever nature and all accidents involving injury and give result of
last cardiograph examination with date in all cases)
DATE: __________20

PROPOSER'S SIGNATURE:

SPACE FOR DETAILS DURING WHICH THE CERTIFICATE OF VALIDITY FORMING PART OF
THE PROPOSERS' LICENCE HAS BEEN INVALIDATED (State date and cause: If NIL state
NIL.)

DATE: _______20

PROPOSER'S SIGNATURE:

75