Beyond Reassuring - Liability Insurance
Why it’s important
When your company charters an aircraft, you may reasonably expect that it will be properly insured to meet the airline’s liability in the event of an accident or incident. The minimum level of insurance that an airline offering aircraft for commercial charter will hold varies depending on the aircraft type and the territory in which it is registered. The insurance is intended to meet the airline’s relevant obligations to passengers and third parties under the various statutes applicable to air travel, including the Warsaw Convention and Montreal Convention as appropriate however these specified levels may not be enough to meet the total cost of any third party claims arising in the event of a major accident or incident occurring.
Should an incident occur involving an aircraft that you have chartered, it is possible that that a claim may also be made against your company as the charterer. For many businesses, this is a concern that is coming increasingly to the fore and one immediate consideration in most cases is for the charterers to have themselves named as additionally insured on the airline’s policy. This is certainly good practice however such a request is not always granted by the insurer and in some instances there can be additional costs involved. In any event, whilst the minimum level of insurance carried by many airlines will meet the legal requirement it may not be sufficient to meet such third party claims in full having already paid out on the statutory obligations.
To ensure that Hunt & Palmer clients have the reassurance of knowing they will not be left exposed should the unthinkable happen, we have secured US$200,000,000 insurance cover under a ‘Non-owned aircraft liability’ (NOL) policy.
What does that mean for people chartering through us?
In simple terms it means that in the event of a claim being made against you for death, injury and/or property damage to third parties as a result of a loss involving the aircraft you have chartered, this insurance is here to meet that liability. Our NOL insurance sits apart from the airline’s own insurance, although their policy will always be the first call should an accident or incident occur involving one of their aircraft. We are not insuring the airline or the aircraft, our NOL policy covers you and Hunt & Palmer, therefore no part of the US$200,000,000 available is used to meet the airline’s liabilities.
Ensure your broker is covered
It is important to appreciate that “Charter Brokers” are not the aircraft operator, despite the often misleading manner in which some choose to represent themselves as such. As they are not the operator, there is no statutory requirement for Brokers to have aviation liability insurance and the standard types of Public and Product liability polices retained by most businesses will likely not cover such an incident or, where they do, the sum insured will be woefully inadequate for any claim arising from a major incident.
For various reasons, the majority of brokers are either not able to obtain this level of liability insurance or are unwilling to do so however, it is not unusual for a few unprincipled companies to suggest to their clients that they have such a policy in place when in fact they do not. Always ask your broker to see a current certificate of insurance in the name of the company concerned and check that your company name is shown as additionally insured. Also, ensure that the level of cover given on the certificate matches what you are being told by your broker.
The Hunt & Palmer difference
This added reassurance for you is an added benefit of chartering with us. At Hunt & Palmer we believe that all of our clients are entitled to fly with peace of mind and therefore there is NO premium or administration fee for you to pay in respect of our NOL cover.