Specified in paragraph 5 of Part I of Schedule 1 to the Regulated Activities Order (Contracts of general insurance) as insurance against damage arising out of or in connection with the use of aircraft, including third party risks and carrier’s liability.

Covers airlines for a pre-agreed daily amount in the event of the aircraft being out of use due to an ‘intervening peril’ (peril covered under hull all risks and war risks covers), but can extend to mechanical breakdown, groundings, air traffic control strikes, etc. Cover does not apply to total loss situations. Financiers may insist that cover is arranged to fund lease payments during periods of repair. Claims payments may be sufficient to help the insured meet other fixed costs. See TOTAL LOSS ONLY INSURANCE.

Protects aircraft lessor against confiscatory acts (typically by the country of domicile of owner and/or country of registration) and inability to enforce possessory rights following a default under the lease. The insurance may be extended through a contingent war policy to cover damage to the aircraft whilst awaiting repossession.

Main policies are aviation hull all risks and aviation liability. Other special forms of aviation insurance effected by airlines are: war risks; deductible insurance; unearned premium; mechanical breakdown; loss of use. Airlines also need a full range of non-marine policies covering ground property, vehicles, risks and liabilities related to ground operations. There are standard aviation wordings (see AVNIC) but most airlines have individual ‘manuscript’ wordings devised with brokers to reflect their particular circumstances. Premiums are based on ‘own experience’, regional and global airline experience, type of aircraft, route structure, passenger make-up and individual legal situations.

A large passenger aircraft plying in an airline on scheduled services over regular routes. Travel as a passenger on such aircraft is not normally excluded under personal accident insurance policies.

policy An aviation policy covering: 1. Premises legal liability to protect the insured against claims arising out of the use of his premises by third parties or passengers; 2. Hangar-keepers’ legal liability in respect of the insured’s liability as a bailee for aircraft and equipment on the ground; 3. Products’ legal liability to cover the risk associated with servicing or repairing aircraft or sale of fuel; 4. ‘Control tower liability’ is also covered. Cover can be extended to cover consequential loss following unexpected closure of the airport.

Means being on the ‘apron’ of an airport making contact with aircraft possible. A motor insurer might in some circumstances exclude all liability from accidents while the insured vehicle is airside. In contract works insurance where the site of the work is at an airport, insurers will take a more stringent view of the work than the same work landside (no contact with aircraft).

ARB advises the Civil Aviation Authority on ‘design, construction, and maintenance of aircraft and all related matters.

It is implied in all aviation policies that aircraft are maintained to specified standards following procedures laid down by the aircraft manufacturers in conjunction with the relevant civil aviation authority. The airline must keep maintenance records. Aircraft and engine manufacturers also specify the parameters for an aircraft’s operation. If an airline breaches any of these requirements the policy may be invalidated.