Nov. 20, 2023
If you’re operating a business aircraft domestically, a standard hull and liability insurance policy should most likely bring you peace of mind, according to experts. However, if you’re flying internationally, you need extra coverage.
Insurers are wary of “perils,” which make for “exclusions.” To override them, you’ll need “endorsements.” And beware: Even if your policy is a worldwide policy, it very likely isn’t.
Aircraft type, pilot qualifications and the requirements of destination countries all come into play, says Joe Williams, senior vice president and managing director for aviation with Marsh McLennan.
The aircraft’s make and model, age, home base and pilot qualifications are the basic “fundamental underwriting considerations of aircraft hull and liability policies,” Williams says.
Brokers work with underwriters “to make certain that proper insurance coverage is in place for the operator, based upon the country or countries traveled to or over,” says Eric Barfield, president, AssuredPartners Aerospace.
“In the end, you can generally insure anything around the globe, depending on one’s premium pain threshold.”
European requirements are set forth in a detailed regulation known as EC785/2004. Even for flyovers, operators must satisfy EC785 “or pay a very healthy fine along with a long delay in flight ops.” Barfield says that an EC785 endorsement can cost as much as $10,000.
“The European Union has minimum insurance requirements,” says Barfield. “The heavier the aircraft, the higher the limit of liability required.”
Some EU countries, including Germany and Italy, require their own certificates, notes Jim Gardner, president of the James A. Gardner Company, an aviation specialty broker.
“Every country is different,” he says.
Going farther East? Requirements get more onerous, or travel might even be impossible. “A couple of years ago, the CURB (Crimea, Ukraine, Russia, Belarus) area would not be much of an issue for international operations.
“Now,” Williams says, “business jet owners very likely have a problem.”
Indeed, underwriters now won’t grant coverage to those areas at all, says Gardner. Forget about Cuba and Haiti, too. For other hazardous areas, he says, you’ll need war hull, war liability and terrorism insurance – known as TRIA.
War hull and liability “protects you from more than just a war,” he says. It can protect you from riots, civil commotion, vandalism and confiscation,” Gardner says.
“The best time to secure proper coverage is at the inception of a new aircraft policy or at renewal,” he says. “Giving your broker full details of your anticipated destinations can go a long way to properly insuring your aircraft.”
“Worldwide doesn’t necessarily mean worldwide due to OFAC [U.S. Treasury Department Office of Foreign Assets Control] sanctions,” says Williams.
“Policy territories” in insurance contracts can be very different, according to Williams. “If you don’t know what your policy territory is, you should ask your broker.”
Overall, says Gardner, “It’s not rocket science, but it’s involved. It requires attention to detail and is a matter of knowing what questions to ask.”