Insurance for aircraft users: protecting yourself as a passenger or shipper

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While airlines are at the heart of the aeronautical insurance systemBut they are not the only ones concerned. As a user - whether you are an occasional or regular passenger, a private pilot, a member of a flying club, or a company shipping goods by air - you also have specific needs in terms of cover. Of course you do, the carrier's civil liability (and insurance) offers initial protection, but it is often limited and subject to strict conditions. Fortunately, there are insurance solutions available to supplement this cover or to act independently, whether to cover the consequences of a personal accident or to guarantee the value of your goods during transport. Let's take a look at these guarantees aimed directly at users.

Personal accident insurance

When you board an aircraft, the risk of personal injuryalthough statistically low, cannot be completely ruled out. There are two main types of contract that provide compensation in the event of a problem.

Individual "in lieu" insurance (standard Annex D agreement)

This type of cover is original in that it is not usually taken out by the person who will ultimately be compensated, but by the aircraft operator (the airline, the flying club, the organiser of a first flight, etc.). This is a insurance "on behalf of whom it may concern"., a mechanism provided for in Article L. 112-1 of the Insurance Code. The operator takes out cover for a certain number of "seats" in his aircraft, and anyone occupying one of these seats at the time of an accident will be covered.

Who is considered insured ? The definition is often broad: it covers all occupants of the aircraft, whether passengers or crew members, within the limit, of course, of the number of seats actually insured and mentioned in the special conditions of the contract.

L'scope of cover is also designed to be fairly protective. Typically, it covers accidents that occur while the insured is on board the aircraft, getting on or off. But it often goes further, by including accidents that could happen to the policyholder due to of the aircraft even though he or she is no longer on board (for example, being hit by a part that comes loose after disembarking). Accidents related to the use of the aircraft's rescue equipment are also generally covered, as are accidents occurring during the insured's medical transfer from the scene of the accident to a hospital.

The specific exclusions are relatively limited. The classic exclusion is active participation by the insured in acts of violence (riots, terrorism, hijacking, etc.). Drunkenness or the use of drugs by the insured may also be a cause for exclusion, but often only if it is proved that this state was the determining cause of the accident; if the accident is unrelated to this state, cover should apply.

Concerning the compensation paymentsAn important special feature is the so-called "proportional" rule in the event of overcrowding: if, at the time of the accident, there are more people on board than insured seats, the compensation per seat will be reduced on a pro rata basis. For example, if 10 seats are insured for €100,000 each and there are 12 occupants at the time of the accident, each victim (or their beneficiaries) will only receive €100,000 x (10/12). The procedures for determining death or permanent disability (which triggers the payment of a lump sum or a fraction thereof according to a scale) are detailed in the policy. Essential point: as this is a lump-sum personal insurance policy, the insurer paying the compensation may not exercise a subrogation right against the party responsible for the accident. The compensation received under this policy is therefore cumulative with any compensation obtained from the carrier's liability insurer.

Individual insurance by name

In addition to any "on-the-spot" cover taken out by the operator, any user may, on his or her own initiative and at his or her own expense, take out named personal accident insurance. Several options are available:

• Le short-term accident" contract is often offered to cover a specific trip. Its duration can be automatically extended (for example, by periods of 24 hours up to a maximum of 7 days) if the trip is delayed for reasons of force majeure justified by the beneficiary. These contracts generally stipulate that the insurer is subrogated to the policyholder's rights against the party responsible, but only for compensation benefits (reimbursement of medical treatment costs), in accordance with article L. 121-12 of the Insurance Code.
• Le individual aircraft accidents" policy is more permanent and adaptable. It provides cover for any type of aviation activity. The policy can be adjusted to cover the risks associated with the use of a wide variety of types of aircraft: commercial aircraft, military aircraft, tourist or business aircraft, microlight aircraft, helicopters, balloons, gliders, hang-gliders, etc. Similarly, it can be aimed at different types of pilot: ordinary passenger, professional or private pilot, instructor, flying club member, parachutist, aerobatics enthusiast, etc. The key to these policies is to ensure that you are covered for the risks associated with the use of your aircraft.accuracy of the initial declaration risks: the activities practised, the types of equipment used and the level of practice (leisure, competition, etc.) must be described in detail if cover is to be provided in the event of a claim relating to these activities. Any omission or inaccurate declaration could lead to a refusal of cover or a reduction in compensation.

Insuring transported goods: "cargo" insurance

When a company or individual ships goods by air, the carrier's liability provides initial cover in the event of loss or damage. However, we have seen that this liability is often limited by international conventions. What if the actual value of the goods far exceeds these limits? This is where "cargo" insurance comes in (a term inherited from marine insurance to describe the goods being transported).

Distinction and complementarity with carrier liability

Faculty insurance is a property insuranceIt is signed by the person who has an interest in the goods (the shipper, the consignee or a third party, depending on the terms of the sales contract - Incoterms). Its purpose is to guarantee the real value of goods against transport risks, irrespective of the carrier's liability and its limitations. It therefore offers much more comprehensive protection than simple liability cover. In the event of a claim, the facultative insurer indemnifies its customer, and may then exercise recourse (subrogation) against the carrier to recover what the latter should legally have paid within the limits of its own liability.

The general economy of the contract

Again inspired by marine insurance practices, air cargo insurance has its own logic.

• Purpose and scope of cover : It covers material damage and loss to insured goods, as well as loss of weight or quantity during transport. Certain incidental costs associated with a claim (salvage costs, expert's fees, etc.) may also be covered. The basic cover is generally "all risksThis means that any harmful event is covered, except those expressly excluded by the policy.
• Exclusions : The exclusions are similar to those for carrier's liability (inherent defect of the goods, normal transport delays, poor packaging by the sender, contraband, etc.). However, certain major exclusions can often be excluded. purchased for an additional premium. This is particularly the case for war risks and similar risks (terrorism, strikes, riots, etc.), which can be covered under a special agreement (often common to land, sea and air transport). In addition, as a result of new developments, modern policies often cover damage resulting from"Major accidents to the carrier aircraft, even if the initial cause (e.g. a natural disaster) would normally be excluded. Typically covered are damages resulting from the aircraft crashing, a collision, a fire or explosion on board, or even a cyclone or earthquake affecting the flight.
• Warranty period : It depends on the type of font chosen.
  • La travel" policy covers a single specific journey. Cover generally begins when the goods, packed for shipment, leave the sender's warehouses and ends when they enter the consignee's warehouses at the intended destination. To ensure that the goods do not remain under cover indefinitely after their arrival, cover often ceases automatically on expiry of a period (e.g. 15 days) after the arrival of the aircraft at the destination airport, even if they have not yet reached the consignee's final premises. Any delivery taken by the consignee before the normal end of the guarantee period also brings it to an end.
  • La subscription" policy (or "to be supplied") is designed for companies that make regular shipments. It is generally taken out for one year, renewable by tacit agreement. The policyholder undertakes to declare and insure with this insurer all its shipments falling within the scope defined by the contract (for example, all exports by air). In return, the insurer undertakes to cover them automatically as soon as they are exposed to the risks covered. The insured must then declare a posteriori details of each shipment (nature, value, destination, etc.): this is the "feed declaration". If the insured party is acting on behalf of a third party (such as a freight forwarder), he or she is often required to provide a "notice of supply". before each shipment. The policy sets a "full maximumThis is the maximum value guaranteed per shipment and per aircraft. The insurer generally reserves the right to check the insured's books and correspondence to ensure compliance with its declaration obligations.

Cargo claims management

In the event of damage or loss, a specific procedure, again inherited from maritime practice, must be followed.

• Role of the insured/recipient : As soon as it arrives (or is informed that it has not arrived), it must take all precautionary measures: immediately have the damage ascertained by an approved independent expert (the "Damage Commissioner) and above all, maintain recourse against liable third partiesThe insurer is obliged to inform the carrier, in particular the carrier, by making the necessary reservations and complying with the protest deadlines. Failure to comply with these obligations may result in a reduction, or even loss, of the right to compensation under facultative insurance, as this compromises the insurer's ability to subsequently exercise its subrogated recourse.
• Damage assessment : The allowance is calculated on the basis of the insured valueThis value must be declared by the policyholder at the time the contract is concluded (or at the time of purchase in the case of a subscription policy) and must be substantiated in the event of a claim (invoice, etc.). This value constitutes the ceiling the insurer's liability. To determine the amount of compensation in the event of partial damage, the value of the goods in sound condition is compared to their value in damaged condition at the place of destination. The percentage of depreciation thus obtained is applied to the insured value (this is the proportional rule). If the damaged goods have had to be sold en route, the compensation is the difference between the insured value and the net proceeds of the sale.
• Abandonment : In extreme cases, the insured may "relinquish" the damaged goods to the insurer, i.e. transfer ownership to the insurer in return for payment of the full sum insured. This option is available only in limited situations: presumed total loss of the aircraft (for example, no news after 3 months), or when the amount of material damage reaches a very high threshold (often 3/4) of the insured value. However, the insurer is not obliged to accept the relinquishment; it has a period of time in which to make its decision following notification by the insured.
• Subrogation : Once the indemnity has been paid, the facultative insurer is automatically subrogated in all the insured's rights and actions against liable third parties (carrier, handler, etc.), up to the amount paid.

Whether you're flying or shipping goods, understanding the insurance available beyond the carrier's basic cover is essential. Choose the cover that's right for your specific needs, our firm can advise you.

Sources

• Standard policies and related agreements (Convention D, Facultés policies) of French insurers (implicit reference)
• Insurance Code (in particular articles L. 112-1, L. 131-2, L. 121-12)
• Civil Aviation Code (general principles of transport)
• General principles of personal insurance and marine/transport insurance.

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