Aviation Insurance (Luftfahrtversicherung)
Aviation insurance covers hull and liability risks associated with the operation of aircraft and, due to the high individual risk exposures involved, is predominantly underwritten in the international specialty insurance market.
Comparison profile
- Trigger
- Occurrence
- Insured interest
- Physical damage to the insured aircraft (hull) and the operator's third-party liability towards passengers, cargo interests and other third parties arising from the operation of the aircraft.
- Rating basis
- Aircraft type, age and value, Passenger/seat capacity and route network, Pilot qualifications and operator safety record, Sums insured for hull and liability
- Typical limits
- Hull cover to agreed value; liability limits per occurrence commonly range from a few million up to several hundred million CHF/EUR/USD for commercial carriers, reflecting statutory minimums and passenger numbers.
- Target segments
- Industry (airlines, airports, MRO providers), Aircraft owners and operators (private and commercial)
Insured events
- Total or partial loss of the aircraft (hull)
- Bodily injury to passengers and third parties
- Cargo loss or damage
- Damage to third-party property (e.g. airport infrastructure)
- Search, rescue and wreckage removal costs
Key exclusions
- War, hijacking and terrorism (generally underwritten separately as war risk cover)
- Wear and tear, gradual deterioration and mechanical breakdown not caused by an insured accident
- Non-compliance with airworthiness directives or maintenance requirements
- Operation outside the agreed geographic or usage limits
- Nuclear risks
Compulsory insurance
- EU: Regulation (EC) No 785/2004 sets minimum third-party liability insurance requirements for air carriers and aircraft operators flying within, into, out of or over EU territory
- Most jurisdictions require aircraft operators to hold minimum third-party liability cover as a condition of the operating licence, consistent with Article 15 of the Chicago Convention
Concept
Aviation insurance comprises a bundle of specialized insurance products for aircraft operators, airport operators, air carriers, and suppliers to the aviation industry. Central coverage components include aviation hull insurance (damage to the aircraft itself), aviation liability insurance (claims by third parties, passengers, and cargo), and war and terrorism risk cover, which, due to its particular hazard potential, is generally underwritten separately.
Underwriting in the Specialty Insurance Market
Because of the high sums insured for individual aircraft and the potentially catastrophic loss amounts in the event of a total loss, aviation insurance is underwritten almost exclusively in the international specialty insurance market (particularly the London Market), frequently through broadly diversified co-insurance consortia.
Particularities of Risk Assessment
Risk assessment in aviation insurance requires specialized technical underwriting expertise regarding aircraft types, maintenance standards, pilot qualifications, and route networks; the line is also closely interrelated with international sanctions regimes and geopolitical risks, particularly in connection with war and conflict zones.
Comparison and delineation
Aviation insurance is designed for manned, certified aircraft and the regulatory regime (airworthiness, pilot licensing, ATC integration) that governs them; for small unmanned aerial systems, drone insurance offers a lighter-weight, purpose-built alternative that reflects the different risk profile, regulatory framework and typically much lower sums insured of commercial or hobbyist drone operations. Operators who run both manned aircraft and drone fleets, for example for aerial survey or inspection work, typically need separate policies for each, since standard aviation wordings generally exclude unmanned aircraft and vice versa.