Aviation Insurance

Concept of Coverage

Ta’awuniya Insurance Company offers Aviation Insurance that covers aircraft hulls against risks such as natural hazards, aircraft risks, airport risks, human error risks, and war risks, in addition to liability cover for passengers and their baggage. This insurance targets owners, operators, and lessees of private and commercial aircraft.

Indemnity Scope

Coverage applies to losses occurring on the ground, during taxiing, or in flight, up to the sum insured/agreed value. Indemnity may be provided as cash compensation, replacement, or repair of the loss/damage affecting the insured aircraft.

Types of Coverage

1. Air Transport Insurance Policy: This policy covers the purchaser’s failure to take delivery of the aircraft contracted from the manufacturer, provides full insurance protection for the air carrier, and covers aviation premiums for non-standard purposes that increase the level of risk.
2. Aircraft Hull Insurance Policy: Covers aircraft hulls against multiple risks such as fire, lightning, explosion, storms, earthquakes, floods, frost, snow, collapse of hangars, collision, theft, flames, embezzlement, and disappearance of the aircraft (not found within a specified period defined by the policy).

Excluded Risks

1. Gradual wear and tear due to use.
2. Depreciation/decline in value due to ageing.
3. Manufacturing defects.
4. Mechanical or electrical breakdown unless resulting from fire, explosion, or collision with an external object.
5. Theft/hold-up/intentional damage by the insured or their workers/employees.
6. Damages/injuries affecting passengers, crew, or items carried on board.
7. Third-party bodily/property damage due to collision with the aircraft or items falling from it.

General Exclusions

1. Losses while the aircraft is used for illegal purposes or purposes not stated in the policy.
2. Losses while operated by persons who are not properly licensed to fly the aircraft.
3. War-related losses (directly or indirectly).
4. Nuclear/radioactive-related losses (directly or indirectly).
5. Losses occurring outside the geographic area specified in the policy, except in cases of force majeure.

Selected Endorsements (Hull Policy)

• Addition & Deletion Clause

Commonly used for fleet policies to add or remove aircraft from the schedule during the policy period with proportional additional/return premiums. It may also require annual policies for added aircraft and may involve short-period rates.

• Return Premium for Grounding Clause

If an insured aircraft is grounded and not operated, flight-risk cover is suspended during the grounding period and return premium is calculated at policy end under stated conditions (including notification requirements and cases where no return premium applies). The return premium is calculated as 75% of the difference between the annual all-risks rate and the annual ground-risks rate for the actual grounding period.