The aviation industry supports more than 58 million jobs worldwide and is continuing to grow, with more than 36,000 new airliners expected to be built over the next 20 years.
Here, Zurich takes a look at the diverse range of organisations with potential aviation exposures.
The range of organisations with potential aviation exposures is diverse, but can be broadly categorised as major component manufacturers, minor component manufacturers and service providers. Liabilities could arise in a number of ways, from a design fault or defect in a piece of machinery that leads to an accident, to contamination that causes food poisoning for passengers.
Major components on aircraft include aviation electronic systems (avionics), flight control systems, fuel control systems and landing gears. There have been numerous well-documented incidents of pilots having to perform emergency landings following landing gear failure, including a Virgin Atlantic flight from Gatwick to Las Vegas in December 2014. It was widely reported in the national press that after the problem was noticed soon after take-off, the pilot spent several hours circling southern England in order to burn fuel to reduce the risk of fire when making his emergency landing.
Minor aircraft components can include raw materials such as metals, through to finished sub-assemblies including switches and electronics. On 2 September 1998, 229 people died when a Swissair flight from New York to Geneva crashed into the Atlantic Ocean after a fire broke out on board. An investigation concluded the fire was probably caused by an electrical fault in the in-flight entertainment system. This remains one of the most serious air crashes to have been caused by the failure of a non-flight-critical component.
Service providers operating airside – whether on a regular or occasional basis – also have aviation exposures. These could include: refiners, refuellers, airport retailers, construction contractors, business service suppliers, security screeners, baggage/cargo handlers and hangar keepers. In 2012, a Heathrow baggage cart driver caused more than £1 million of damage after misjudging the height of the cart and slicing through the tail of a Scandinavian Airlines plane. Aviation liability insurance can cover damages owed by a service provider to a third party following an accident caused by an employee.
Achieving comprehensive cover for all aviation and non-aviation exposures can be challenging for companies, particularly those with airside motor exposures, as there can be a grey area concerning where the Road Traffic Act ends and airside coverage begins. Companies that take out aviation and non-aviation policies with multiple insurance carriers risk gaps in cover, or paying extra for overlapping coverage.
To provide true peace of mind for companies with aviation exposures, Zurich has teamed up with Mitsui Sumitomo Insurance to provide a single solution to cover aviation and non-aviation exposures, to minimise gaps in cover. Customers can also benefit from consistency in claims handling and Zurich’s Whole Account View, which means their premiums on other lines will be taken into account.
Advantages of the Zurich/Mitsui solution:
- Whole account view
- Efficient coverage
- Consistent claims handling
Aviation risks can emerge in unexpected ways, which is why it is vital for companies to partner with an insurer who can provide comprehensive cover for all their exposures. Customers who choose the Zurich/Mitsui solution – which provides cover for aviation products and services with the exception of hull – will benefit from Zurich’s customer-centred approach and Mitsui's decades of aviation underwriting experience.