PO BOX 899, PINE, COLORADO 80470 PHONE: 720.208.0844 FAX: 720.208.0845

War Risk Liability and War Risk Hull Physical Damage Coverage

Coverage That Should Be Part Of Every Standard A++ Manned and Unmanned Aircraft Insurance Policy

War Risk Insurance is largely misunderstood but should be carried by anyone who operates any type of aircraft particularly those that are operated internationally or that may be subject to hijacking, hacking or confiscation. Hijacking is essentially any unlawful seizure or wrongful exercise of control of the aircraft or crew in flight including the taking or hacking of an unmanned aerial system or drone. All aviation insurance policies exclude War Risk Liability and War Risk Hull Physical Damage Exposures however the coverage can be included, or written back into the policy at no cost. All standard A++ insurance policies contain and endorsement that removes most of the exclusionary language known as a write-back or buy-back. The war risk exclusionary language contained in aviation insurance policies that we’re most concerned about in this series is as follows:

“This policy does not cover claims caused by: f) Confiscation, nationalization, seizure, restraint, detention, appropriation, requisition for title or use by or under the order of any Government, (whether civil, military or de facto) or public or local authority; g) Hi-jacking or any unlawful seizure or wrongful exercise of control of the aircraft or crew in flight (including any attempt at such seizure or control) made by any person or persons on board the aircraft acting without the consent of the Insured. Furthermore, this policy does not cover claims arising whilst the aircraft is outside the control of the Insured by reason of any of the above perils. The aircraft shall be deemed to have been restored to the control of the Insured on the safe return of the aircraft to the Insured at an airfield not excluded by the geographical limits of this policy, and entirely suitable for the operation of the aircraft (such safe return shall require that the aircraft be parked with engines shut down and under no duress).”

All standard aviation insurance policies provided by A++ insurers will include the war risk buy-back endorsement and all knowledgeable aviation specialty insurance agents and brokers will ensure that the coverage is included in the policy. It is important however to check your policy and question your agent or broker to ensure that the coverage has been included because not all policies provide the coverage and not all agents are experienced our knowledgeable enough to include it. If your policy does not include the War Risk write-back endorsement, you should reconsider and replace the policy. The War Risk write-back endorsement will provide, among other things, the following coverage’s to the Named Insured. War Risk Hull Physical Damage (Confiscation) The War Risk write-back will return coverage for confiscation in the event that a government confiscates or seizes the aircraft claiming some type of violation or any other reason. In this case, you must carry hull physical damage coverage under the policy and in the event that the aircraft is confiscated or seized, your insurer will pay you for the insured value of the aircraft per the terms of the policy and take on the problem of getting the aircraft back. An example of a loss that was covered under the war risk hull physical damage was when an Embraer Legacy landed after a mid-air collision with a Gol 737 over Brazil in 2006. The Brazilian government seized the Legacy and the owner filed a claim under the war risk provisions of their policy. War Risk Liability The War Risk buy-back will return liability coverage to the Named Insured in event that the aircraft is hi-jacked or hacked or any other unlawful seizure or wrongful taking of control of the aircraft without consent of the Named Insured. In this case, the policy will provide coverage to the Named Insured for bodily injury and property damage arising from the hi-jacking or unlawful and wrongful seizure of control of the aircraft by a third party without the consent of the Named Insured. In this example, if an aircraft or UAS is hi-jacked and the hi-jacker subsequently uses the aircraft to cause bodily injury or property damage to third parties, an argument could be made that the Named Insured was negligent in their failure to maintain control of the aircraft. War Risk Liability coverage could respond in that scenario to defend and protect the Named Insured from those claims and suits.