Insurance for aviation engineering operations

a) Public liability insurance
b) Hangar keeper’s insurance
c) Product liability insurance
d) Workshop hull insurance
e) Erection all risks insurance

If you are in charge of an aviation engineering operation, you will know that it is exposed to a lot of risks. Mishaps occurring during repair work which damage the aircraft can lead to severe claims for compensation just as much as damage that only becomes evident later on, after the aircraft has been handed back to the customer.

In the event of damage, you might end up facing claims for property damage, personal injury, cancellation costs or lost profits, impairment of value etc.

Any insurance solution requires an extremely in-depth risk assessment, yet this insurance segment also demands extensive research and annual reviews.

Here is a brief summary of the various types of cover

a.) Aviation general liability insurance

This insurance covers the legal liability of the operator for damage occurring on the premises and on the property as part of its office operations.

If, for example, you receive a visitor and he/she sustains an injury in your workshop or office or because something was carelessly left standing or lying in the way, you can probably be held liable for being at fault.

Other elements can be added to this cover (especially environmental and environmental damage liability cover, ground service vehicles and platforms that do not require a licence, aviation liability cover etc.).
Conventional elements of cover should also be taken into account, such as lost keys and damage to rented property.

Please note that any damage caused to and by aircraft and their parts is not covered by this insurance. The following insurance solutions are available for this.

b.) Aviation hangar keeper’s insurance

When you take an aircraft into the custody of your workshop, you bear the risk that the repair or other handling of the aircraft or its components causes damage for which you or your employees, freelancers or subcontractors are responsible. This is where hangar keeper’s insurance comes in.

It covers not only property damage and consequential property damage, but also financial losses resulting from the event.

It can also cover workshop and test flights, transfer and positioning flights and grounding.

We are happy to advise you on exclusions for this type of insurance, as with all the other sectors. We can help you assess the risk of active contributory damage occurring to which you are exposed, and to what extent. A dropped engine can quickly become an unwanted topic of conversation if exclusions apply.

c.) Aviation product liability insurance

If your aviation engineering operation supplies or simply manufactures products, you can be held liable by third parties (your clients) for damage resulting from a defective installation or the defective nature of the product.

This can result in personal injury, damage to property, consequential property damage and financial losses, all of which can be covered by a product liability insurance policy.

Unlike hangar keeper’s insurance, this damage occurs after the product has been handed over to the buyer/client, after the completion of work or after the performance of the service.

d.) Non owned aircraft hull insurance

This insurance covers damage to a third-party aircraft that occurs while the aircraft is in the workshop – as part of the ground risk – or during test flights. The insurance even covers parts removed from the aircraft that are going to be re-installed, provided they are in the direct vicinity of the insured aircraft.

Unlike hangar keeper’s insurance, it is not relevant whether or not the workshop or its employees caused the damage due to negligence.

e.) Erection all risks insurance

Some insurers will agree a disclaimer for active contributory damage. This means that no compensation will be paid for the part – or sometimes even the entire unit or module – that was being repaired and was damaged.

We hope that this never happens to you!
The damage caused by an engine that falls while it is being replaced can threaten the existence of the business.

Erection all risks insurance can close this ‘loophole’ by paying out compensation for the damage to the part.