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Government airline cover could be permanent


December 10, 2001   by Canadian Underwriter


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Coverage for airlines introduced by the government following the September 11 terrorist attacks could become a permanent measure, the National Post is reporting. This comes after an announcement by federal Transport Minister David Collenette that the temporary coverage, which involves third-party aviation war risk, would be extended into next year.
Originally the coverage was introduce following insurer reluctance to indemnify airlines after September 11. First launched on September 22, the coverage was to end December 22. Now the Minister says the coverage will be offered until February 4, 2001.
Upon making the announcement, Collenette said, “The government’s intervention in the insurance market is temporary. Industry stakeholders must continue to work towards a longer-term commercial solution.”
However, in comments appearing in the Post, Collenette says the program could become permanent. He added that insurers would be the ones hurt by the move, as they would end up losing premiums if they do not negotiate coverage.
“The government is examining options for longer-term solutions if the insurance industry cannot meet the needs of its customers. However, the costs of any government assistance should be borne by the users of transportation, not the general public,” Collenette says in a Transport Canada press release.
The coverage extends to Canadian air carriers, airports, NAV CANADA, the Air Transport Security Corporation and other essential service providers at airports, such as ground handlers and re-fuellers.


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