What Is Aviation War Coverage, and Why Do I Need It?

Property & Casualty

What Is Aviation War Coverage, and Why Do I Need It?

Despite what the term implies, war risks and related perils are more practical to your operation than you think. Events such as invasion, acts of foreign enemies, hostilities, civil war, rebellion, revolution, military power, strikes, riots and civil commotions may not be of concern in your day-to-day operation. However, acts of malicious intent and confiscation of an aircraft are practical threats that should be factored into your aviation insurance decision. For instance, what if something happens outside your control involving someone with access to your aircraft acting with malicious intent?

Previous loss events that include acts of malicious intent include someone breaking through the airport fence and tagging a jet aircraft that was not in a hanger overnight with spray paint. Another example of malicious intent could be employees or other persons that may hijack your aircraft and use it for any reason, posing a threat or harm to other persons or property.

Unless you purchase the War Hull & Liability writeback coverage, these acts may not be covered under your standard aircraft insurance policy with a War exclusion.

While the probability of these occurrences seems low, it is an important area of risk to measure when evaluating your aviation insurance placement. You can take steps to help prevent these threats from becoming a reality. For instance, keep your aircraft secured and locked in a monitored hangar. Limit and monitor access to your aircraft or ramp space and ensure all personnel follows safety training guidelines, including standard operating procedures.

International confiscation of your aircraft is another important reason for War Hull coverage to be carried. For example, if you fly to Canada, Mexico or another international destination and the aircraft is seized for any reason, there will not be coverage to replace the aircraft should the confiscating government decide to retain the asset.

War Liability coverage for an aircraft is also aggregated, meaning your per occurrence liability limit is limited to the limit purchased on an annual basis. War Liability is offered in a primary $50,000,000 layer per occurrence AND in the annual aggregate, meaning your limit could be eroded and exhausted quickly. Your primary limit of liability only has a per-occurrence limit, meaning you can enjoy the limit for many occurrences throughout the policy term without an annual aggregate limit. Excess War liability limit layers can be purchased in layers of $50,000,000 up to but not exceeding the primary limit of liability to address this issue.

Adding the war risks and associated perils endorsement as a writeback coverage that is otherwise excluded helps protect you from acts of malicious intent and foreign confiscation. This endorsement can also provide coverage for other war-related risks. While there are several ongoing conflicts, war premiums remain affordable and available in terms of capacity for a very small percentage of your overall premium charge. It may be worth considering adding this coverage to your placement if you have not done so already.

Another advantage of purchasing War Hull and Liability coverage is that it may allow the carrier to offer you a more competitive price on TRIA or Terrorism Risk Insurance Act coverage. This coverage helps protect you from losses arising out of certified acts of Terrorism, meaning that any act certified by the Secretary, in concurrence with the Secretary of State, and the Attorney General of the United States (three separate individuals that govern coverage under TRIA, not your insurance contract), would be covered under the Terrorism Risk Insurance Act.

For more information or to schedule a policy review with one of our aviation professionals, please reach out to our Aviation Team.

Craig Birch

Vice President of Aviation

DISCLAIMER: Brown & Brown, Inc. and all its affiliates, do not provide legal, regulatory or tax guidance, or advice. If legal advice counsel or representation is needed, the services of a legal professional should be sought. The information in this document is intended to provide a general overview of the topics and services contained herein. Brown & Brown, Inc. and all its affiliates, make no representation or warranty as to the accuracy or completeness of the document and undertakes no obligation to update or revise the document based upon new information or future changes.