Under a new aviation policy designed by McGill and Partners previous exclusion in aviation hull war policies for aviation spares that are not in transit. This specialist aviation insurance solution will cover high-value aircraft components exposed to war-related risks while on the ground.
The product, developed with London Market carriers, provides protection for aviation spares that are not in transit. Historically, aviation hull war policies have only covered such assets during transportation by sea or air, leaving equipment stored in warehouses and hangars without protection against conflict-related losses.
The new policy addresses that vulnerability by covering physical loss or damage arising from a range of war perils, including war, invasion, hostilities, civil war, rebellion and insurrection, as well as military or usurped power. Cover is subject to defined limits, with a sum insured per item and an annual aggregate cap.
The launch comes amid heightened geopolitical tensions, with recent conflict in the Middle East highlighting the risks faced by aviation infrastructure and ground-based assets.
Jon Petursson, a partner in the aviation team at McGill and Partners, said: “For years, traditional hull war policies have left airlines and lessors significantly exposed to financial loss due to insurance coverage for spare parts being restricted while they are stored.
“Multiple warehouses and hangars hold significant inventories of high-value assets, including individual engines worth up to US$50m, with no existing protection for stored spares impacted by physical loss as a result of war, and representing a significant and growing balance sheet risk. This solution can provide the assurance, protection and financial security that operators require to safeguard essential equipment and high-value assets, regardless of their operational status.”
Source: cirmagazine.com
