Canadian Underwriter

U.K. extends airline insurance while Canadian deadline looms

January 22, 2002   by Canadian Underwriter

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As the U.K. government decides to extend “war and terrorism” insurance coverage for its airlines until the end of March, the future of Canada’s airlines remains unknown. The U.K.’s former deadline of January 22 has been moved to March 20, but will not be extended further.
The world’s three largest insurance brokerages Aon, Marsh and Willis are participating in the U.K. solution, which the airlines began paying into in early November. The excess insurance would cover losses above US$50 million.
The Canadian government was also among those who stepped in when airlines saw their terrorism liability coverage cancelled or reduced after the September 11 terrorist attacks. The first plan was to run until December 21, but was then extended until February 4. When the decision was made in early December to extend the deadline, federal Transport Minister David Collenette hinted that the government may have to become the permanent insurer of airlines for the coverage. However, he chastised the insurance industry for not providing the coverage at reasonable rates. With that deadline looming, there has been no word on whether the government will continue to offer the “stop gap” coverage, take on the system permanently or leave the airlines to find their own coverage in the market.

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