CAIB 3 Ch 4 - Nov 2024 PDF

CAIB 3: Chapter 4 Ocean Marine and Aviation Insurance CAIB 3  CAIB 3 Section 1 Marine Insurance  Introduction to Marine Insurance Marine insurance is the oldest known form of insurance, dating back to 3000 BC. Covers a...

CAIB 3: Chapter 4 Ocean Marine and Aviation Insurance CAIB 3  CAIB 3 Section 1 Marine Insurance  Introduction to Marine Insurance Marine insurance is the oldest known form of insurance, dating back to 3000 BC. Covers a broad range of hazards faced by those involved in commerce. Hull and liability insurance are essential for ship owners, but this chapter emphasizes insuring cargo. Today, most nations rely on importing and exporting essential goods such as food, raw materials, and machinery. Canada, a major exporter of raw materials like food, fish, forest products, and minerals, conducts much of its trade via ocean-going vessels. Ocean Marine Cargo Insurance Commercial property insurance policies typically exclude coverage for property while "waterborne." A separate ocean marine cargo insurance policy is required for goods transported over water. These policies cover transportation by air, land, rail, and inland waterway vessels in addition to ocean voyages. They are crucial for businesses with goods in transit across various forms of transportation to reach global markets. Determining Insurable Interest in Marine Cargo Insurance Insurable interest is essential for parties seeking to insure cargo. Sellers, buyers, carriers, and financial institutions may hold an insurable interest. Specific documents are crucial in assessing insurable interest: Terms of Sale/Contract Bills of Lading Understanding Terms of Sale and INCOTERMS Terms of Sale define ownership and insurable interest for cargo. INCOTERMS clarify obligations of the buyer and seller: Point in transit when the seller’s obligation ends. Ownership transfer and responsibility for future losses. Responsibility for carriage and insurance. Key Considerations in INCOTERMS Key question: When does ownership transfer from the seller to the buyer? INCOTERMS specify: Point of title transfer in the journey. Responsibility for future losses after delivery. Allocation of carriage responsibilities. Insurance duties of each party. Insurable Interest and Payment Methods in Marine Cargo Insurance The method of payment affects which parties hold an insurable interest in shipped goods. Insurable interest often involves: Financial institutions (in cases of loans or credit purchases) Sellers (particularly in credit-based transactions) Key payment methods in international commerce: Cash in Advance Open Account Draft Letter of Credit Payment Methods and Insurable Interest Cash in Advance: Buyer pays before goods are shipped. Seller’s insurable interest ends upon payment. Open Account: Regular, interval-based settlements (monthly or quarterly). Seller retains insurable interest until payment completion. Draft and Letter of Credit in Marine Cargo Insurance Draft: Payment can be immediate (sight draft) or at a future date (time draft). Seller retains insurable interest until the draft is settled. Letter of Credit: Most common method in international trade. Seller has insurable interest until payment is honored by the buyer’s bank. Understanding Bills of Lading in Marine Cargo Insurance Carriers have an insurable interest in goods they transport, as indicated in the Bill of Lading. Bills of Lading serve three main functions: Contract of Carriage between the ship- owner and shipper. Receipt acknowledging the goods received by the carrier. Document of Title establishing ownership of the goods.  Contract of Carriage: Establishes the legal agreement between shipper and carrier. Bills of Eliminates the need for a separate contract regarding transportation terms. Lading: Defines carrier’s liability and obligations for the goods being transported. Contract of Specifies: Carriage Route of shipment Party responsible for freight charges Description of delivery instructions Types of Bills of Lading: Delivery Instructions Straight Bill of Lading: Directs carrier to deliver goods only to the named consignee. Typically used when goods are paid for or credit arrangements exist between shipper and consignee. Often used by companies transferring goods within a retail chain. Order Bill of Lading: Common in overseas shipments. Allows others to receive goods on behalf of the named consignee. Serves as proof of the consignee’s right to receive goods.  Types of Bills of Lading: Valuation and Special Conditions Released Bill of Lading: No declared value by the shipper; carrier assumes limited liability. International agreements set carrier liability, often around $500 per package. Valued Bill of Lading: Declared value by the shipper specifies carrier liability. Carrier is liable for the declared amount if responsible for loss or damage. Special Conditions: On Deck Bill of Lading: Cargo is stowed on deck at shipper’s risk; carrier liable only for gross negligence. Optional Stowage Bill of Lading: Carrier may stow cargo as needed, including on deck if appropriate. Bills of Lading as a Receipt for Goods Bills of Lading types as receipts: Received for Shipment Bill of Lading (Dock Receipt): Confirms goods were received by carrier for shipment. Clean Bill of Lading: Declares no visible issues with cargo condition at time of receipt. Important for perishable items, as it verifies the condition when shipped. Count Bill of Lading: Records the actual number of units shipped. Useful in cases where not all units arrive at destination. On Board Bill of Lading: Confirms goods were loaded onto the vessel for transport.  Document of Title: Indicates consignee’s right to receive the goods. Title transfer verified by bill of lading or other receipt. Bills of Lading Carrier’s legal liability limitations. as Document of Exempt from liability for losses due to: Fire (unless due to carrier’s fault) Title & Carrier Perils of the sea Acts of God, war, public enemies Liability Limits Strikes, riots, and civil commotions Carriers can further limit liability in bills of lading; additional cargo insurance often required.  Types of Cargo Insurance Policies Cargo insurance options: Individual Policy (Certificate): For single or irregular shipments. Confirms coverage is in place for a specific shipment. Open Policy: General contract for frequent, high-volume shipments. Tailored for ongoing needs of shippers and consignees. Commonly used by businesses with regular international shipments. Characteristics of Open Cargo Policies No Fixed Sum Insured: Limits set per conveyance/location. Separate limits for on-deck vs. under-deck shipments. Global Coverage: Automatically covers goods worldwide. Protects from departure to arrival within specified limits. Reporting Flexibility: Monthly or interval-based reporting to insurer. Unintentional reporting lapses do not void coverage. Open Policy Terms and Premium Structure No Expiry Date: Policies often issued without specific expiration. Some written for set terms (e.g., one year). Pre-Established Premium Rates: Premium rates stated for various shipment types. Premiums paid as each shipment is made. Determining the Insured Value of Cargo Agreed Value Coverage: Ocean cargo policies cover the agreed value of goods. Agreed value may differ from actual market value. Historical Context: Marine Insurance law permits predetermined values. Precise valuation often impractical; agreed values prevent disputes.  Challenges in Determining Cargo Value for Insurance Valuation Complexity: Accurate valuation of cargo is often challenging. Total shipping expenses (packing, freight, duties, etc.) may be unknown in advance. Impact of Time on Value: Extended transit times can affect the value, either increasing or decreasing it. Example 1: Christmas trees lose value if delivered after the holiday season. Example 2: Unforeseen events (e.g., crop damage) may increase the value of goods in transit, like grain. The Valuation Clause in Cargo Insurance Policies Purpose of the Valuation Clause: Provides a standardized method for valuing shipments under open policies. Minimizes need for individual valuations on every shipment. Typical Valuation Formula: “Invoice amount + all related charges + prepaid/guaranteed freight + 10%” Includes premium, freight, and other relevant costs. Benefits: Ensures consistency in cargo valuation. Reduces disagreements on shipment value if a loss occurs. Components of Insured Cargo Value in Open Policies 1) Cargo Value: Basic invoice cost is the foundation of the insured value. 2) Shipping Costs (Freight): Cost of moving cargo from one port to another. Paid freight contributes to the final value of cargo for resale. 3) Additional Expenses: Includes costs for packing, inland transport, premiums, and fees. 4) Duties and Taxes: Levied at entry point; represent financial loss if damaged goods are unusable.  The Ten Percent Allowance and Its Significance Purpose of the 10% Add-On: Covers natural value increases during transit. Provides a buffer for loss of potential profit. Situational Adjustments: The 10% may be increased based on: Type of goods Expected destination value Checkpoint Challenge Percentage of Insured Value Lost in Marine Cargo Insurance 1906 Marine Insurance Act: Established core principles for global marine insurance practices. Many policies require claims to be settled per "English law and practice." Damage Calculation Method: Loss measured as a percentage of insured value lost. Example: If cargo damage is 40% of the insured value, 40% of the policy amount is paid. Total loss results in full policy payout. Benefits: Avoids paying 100% for partial losses when insurance is below cargo’s actual value. Adjusts for overinsurance and underinsurance in settlements. Examples of Percentage- Based Settlement Calculations Underinsurance Example: Cargo Value: $100,000; Insured Amount: $80,000 Damage: 50% of value = $50,000 actual loss Payout: $40,000 (50% of insured amount) Overinsurance Example: Cargo Value: $75,000; Insured Amount: $100,000 Damage: 20% of value = $15,000 actual loss Payout: $20,000 (20% of insured amount)  Efficient Settlements: Enables rapid claims resolution, even in distant markets. Advantages of Simplifies adjustments under complex and changing market conditions. Percentage of Total vs. Partial Losses: Insured Value For total losses, payout equals the insured amount. For partial losses, only the current market value at Lost Basis for delivery location is required. Adjusting Simplified Adjuster Role: Adjusters focus solely on present market value in Losses the delivery market. Eliminates need for price comparisons across different markets or timeframes. Marine Cargo Insurance Policies: Institute Cargo Clauses Institute Cargo Clauses: Developed by the Institute of London Underwriters, commonly used internationally. Marine underwriters in Canada collaborate with global institutes and Lloyd’s for standardized clauses. Three Key Clause Types: Institute Cargo Clauses (A): All Risks Coverage. Institute Cargo Clauses (B): Named Perils Coverage. Institute Cargo Clauses (C): Named Perils Coverage (limited scope). Perils Insured Under Institute Cargo Clauses Institute Cargo Clauses (A, B, C): Coverage varies based on clause type and goods insured. A: Broadest, covering all risks. B & C: Named perils, with C providing the most limited scope. Special Treatment for Certain Goods: Specific deductibles apply based on commodity risk (e.g., cement in paper bags, liquids in barrels). Certain exclusions for delicate or temperature-sensitive items: Chocolate: Excludes “heat and sweat” risks. Fresh eggs: Excludes breakage. Trade-Specific Clauses: Customized clauses developed with trade associations for specialized coverage. Common Coverage Clauses in Marine Cargo Insurance: Transit Clause Transit Clause (Warehouse to Warehouse): Coverage from origin (shipper’s warehouse) to final destination. Extends beyond ocean transit to include rail, truck, air, or other inland transit. Coverage ceases if goods remain undelivered 60 days after unloading. Additional Provisions: Coverage excludes rerouted shipments outside the policy’s stated destination. Protection extends to delays or route deviations outside the insured’s control.  Termination of Contract or Carriage Clause in Marine Cargo Insurance Purpose of the Clause: Coverage terminates if the contract of carriage ends unexpectedly before reaching the destination. Common causes include breakdowns, port closures, natural disasters, or strikes. Policy Extensions: Coverage can extend to an alternate location if prompt notice is given to the insurer. Additional premium may be required for extended coverage. Forwarding Charges Clause: Covers extra expenses for unloading, storing, and forwarding goods to the insured destination. Applies only if the contract termination results from an insured risk.  Change of Voyage Clause: Coverage continues if cargo is rerouted to a new destination. Insured must provide prompt notice; additional premium may apply. Coverage terms may adjust based on new destination. Change of Claims - Insurable Interest Clause: Voyage Clause Only parties with insurable interest at the time of loss are eligible for claim payment. and Claims in Insurable interests may vary (sellers, buyers, carriers, financial institutions). Marine Cargo Claims - Lost or Not Lost Provision: Insurance Coverage applies even if cargo was already lost at the time of policy purchase. Applies only if the insured had no prior knowledge or reason to suspect the loss. Exclusions and Warranties in Marine Cargo Insurance Policy Exclusions: Specific risks or events not covered by the policy. Common exclusions may include war, strikes, inherent vice (natural deterioration), and delay. Warranties: Express Warranties: Explicit terms included in the policy contract. Implied Warranties: Legal assumptions inherent in marine insurance, such as seaworthiness of the vessel and proper handling of cargo. Breach of warranties can void coverage. Institute Cargo Clauses Exclusions – Unseaworthiness & Strikes Unseaworthiness and Unfitness Exclusion: Excludes coverage if the vessel or conveyance is unfit for the voyage. Losses excluded if the insured knew of unseaworthiness at loading. Rarely applies as most shippers lack vessel condition knowledge. Strikes Exclusion Clause: Excludes losses from strikes, labor disturbances, riots, or terrorism. Additional coverage available through the Institute Strike Clauses (Cargo).  Institute Cargo Clauses Exclusions – War Exclusion War Exclusion Clause: Excludes coverage for losses caused by war. Coverage for war risks available through Institute War Clauses (Cargo). War coverage duration: Begins upon loading onto the vessel. Ends upon discharge or 15 days post-arrival at the final port.  Warranties in Marine Cargo Insurance Policies Definition: Warranties are conditions that must be met for coverage to apply. Two types in marine insurance: Express Warranties: Explicitly stated in the policy. Implied Warranties: Assumed by law, binding even if not written. Purpose: Warranties ensure that certain standards or conditions are upheld. Marine insurance policies rely on these to manage risk effectively. Express Warranties in Marine Cargo Policies Definition: Express warranties are clearly stated requirements in the policy. Example – Alarm Warranty: Requires the vehicle alarm system to be active, tested, and in working order during transit. Applicable when cargo travels under the control of the insured in vehicles. Purpose: Specific to certain risks, enhancing security for high-risk transport scenarios. Implied Warranties in Marine Cargo Insurance Implied Warranties: Legally assumed, even if not written in the policy. Examples: Legality: The venture must be legal; illegal activities void coverage. No Delay: The voyage must begin promptly; delays increase risk exposure. Purpose: Protects the insurer by requiring fundamental standards of risk. Implied Warranty of No Deviation in Marine Cargo Insurance No Deviation: Assumes that the vessel will follow the most direct or customary route. Deviation increases risk and may void coverage if unauthorized. Deviation Waiver Clause: Shipper or cargo owner may notify the insurer of deviations. Additional premiums may apply for increased exposure. Effect of Breach of Warranty in Marine Cargo Insurance Strict Compliance Required: Breach of warranty allows the insurer to void coverage from the breach date. Statutory Exceptions: Warranty inapplicable due to changed circumstances. Compliance becomes unlawful due to new law. Waivers and Additional Premiums: Insurers may waive breach if journey control is out of the insured’s hands. Immediate notice to insurer required; additional premium may apply. Claims Settlement: Understanding Total Losses in Marine Cargo Insurance Importance of Total vs. Partial Losses: Marine policies may cover partial or total losses; definitions are essential for claims clarity. Types of Total Losses: Actual Total Loss: Complete loss or severe damage leaving no value (e.g., a sunken vessel). Constructive Total Loss: Salvage costs exceed cargo value; considered a loss despite potential for recovery. Total Loss of a Part: Complete loss of specific cargo within a shipment, even if other parts are intact. Partial Losses (Average) in Marine Cargo Insurance Definition of Average: Marine term for partial losses where some property value is saved. Most marine losses are partial (average) losses. Types of Partial Loss (Average): Particular Average: Loss to a specific shipment; covered by insurance. General Average: Losses incurred voluntarily for the safety of the whole venture. Losses are shared by all parties who benefit from the sacrifice. Selecting Policy Coverages for Cargo Losses Total Losses Only: Coverage for complete loss; partial losses are excluded. Typically provided under Institute Cargo Clause (C). Total Losses with Franchise for Partial Losses: Covers total losses and partial losses exceeding a set percentage (franchise). Franchise usually set at 3-5% of insured value. Example: $100,000 cargo with a 3% franchise will cover losses exceeding $3,000. All Partial Losses: Coverage for any partial loss, regardless of amount. Available under Institute Cargo Clause (A).  Subrogation Clause: Insured must protect insurer’s right to recover from responsible third parties. Right of Applies after insurer pays a claim. Subrogation Duty to Preserve Rights: in Marine Insured must ensure that all rights Cargo against carriers, bailees, or third parties are maintained and exercised. Insurance Helps insurers recover payments from liable parties. Underwriting Cargo Insurance: Adapting to Changing Conditions Ocean marine underwriters adjust rates and Dynamic Risk coverages based on world trade, weather, and human conditions. Environment: Significant reliance on judgment and experience. Key Carrier Information: Ship fleet details, seaworthiness, ship-owner’s record. Underwriting Shipper Experience: History of handling similar Factors: cargo and loss ratios Underwriting Considerations: Route, Weather, and Port Conditions Route and Weather: The specific route and seasonal weather risks are assessed for each voyage. Port Conditions: Conditions and political stability of harbors influence underwriting. Poor port infrastructure or political unrest raises risk levels. Cargo Type and Special Risks in Underwriting Cargo Type: Different types of cargo pose varying risks (e.g., perishables, fragile items). Inherent Hazards: Risk assessment for cargo prone to breakage, leakage, theft, or rapid deterioration. On-Deck vs. Below Deck: Cargo stored on deck faces higher exposure, resulting in higher rates. Perils, Deductibles, and Policy Conditions Perils Insured Against: Tailored perils coverage based on route and cargo type. Deductibles and Insured Participation: Policy structure includes deductibles, defining the insured’s financial participation in losses. Higher deductibles may reduce premiums but increase insured risk exposure. Preventing Losses through Proper Packing Practices Preventable Losses: Approximately 80% of cargo losses are preventable, with a third due to theft or non-delivery. Packing Recommendations: Use new, secure packing materials to deter tampering. Techniques: gummed tape, corrugated fasteners, shrink wrap, strapping. Enhanced Security Measures in Cargo Packing Anti-Theft Practices: Avoid descriptive labeling or prominent branding on packages. Use coded markings that are updated regularly. Consolidate smaller packages into single load units to reduce pilferage risk. Clear Instructions: Display delivery and handling instructions on at least three package surfaces. Ocean Marine Hull Insurance Definition: Specialized insurance for marine hulls owned, operated, or chartered. Hull Exposure: Applies to various vessels: tugboats, barges, ferries, freighters, oil tankers, tour boats, fishing vessels. Coverage Customization: Ranges from all risks to total loss-only policies, tailored to client needs. Additional Coverage for War and Strikes: War and strike risks are excluded in standard policies. Separate policies can be purchased; costs vary based on operational territories.  Marine Liabilities and Protection & Indemnity (P&I) Insurance Ship-Owner Liability: Liable for third-party injuries or damages “at sea and in operations contiguous to the sea.” Protection & Indemnity (P&I) Insurance: Covers liabilities beyond hull policy limits, including: Collision damage exceeding hull insurance limits. Loss of life and third-party injury. Pollution, depending on national regulations. Damage to fixed/floating objects (e.g., wharves). Removal of wrecks. P&I Insurance Application Example – Collision Coverage Collision Scenario: Hull Insurance Coverage: $20,000,000 Collision Damage Caused: $25,000,000 Settlement Breakdown: First $20,000,000 covered by hull insurance. Remaining $5,000,000 paid by P&I insurance. Additional Marine- Related Liabilities Ship Repairer’s Legal Liability: Covers shipyards’ liability during vessel repairs. Stevedore’s Legal Liability: Protects land-based operations responsible for loading/unloading vessels. Covers damage to cargo and vessel. Charterer’s Legal Liability: Insures charterers against damage to the vessel and third-party liabilities. Excess liability coverage available through marine “bumbershoot” umbrellas. Customizing Marine Liability Policies to Client Needs Customized Coverage for Unique Exposures: Each client’s marine liability risk profile is unique. Brokers should conduct thorough risk assessments. Policy Comparison: Marine liability policies vary between insurers. Brokers should analyze and compare policy terms for optimal coverage. Checkpoint Challenge  CAIB 3 Section 2 Aviation Insurance  Insuring Exposures to Loss in Aviation Insurance Aviation Insurance Overview: Similar structure to marine insurance. Covers aircraft (hull), operational liabilities, and transported cargo. Coverage Components: Aircraft Hull Insurance: Protects the physical value of the aircraft. Liability Insurance: Covers third-party injuries or damages arising from operations. Cargo Insurance: Insures goods transported by the aircraft. Industry Standard: Based on forms by British Aviation Insurance Group (Canada) Limited, a leading aviation insurer. Aircraft (Hull) Insurance Categories and Coverage Types Insurance Categories: Private Aircraft: Not used for hire or reward. Commercial Aircraft: Excludes instruction/rental. Commercial with Instruction/Rental: Includes training and rental activities. Coverage Options: Hull Coverage "A": All Risks – covers damage while on ground, in motion, or in flight. Hull Coverage "B": Ground and Taxiing – covers damage while on the ground or taxiing. Hull Coverage "C": Ground Risks Only – covers damage only while stationary on the ground. Deductibles for Aircraft (Hull) Insurance Coverage In Motion Deductible: Applies when the aircraft is in flight or moving under its own power. Moored Deductible: For float or amphibious aircraft; also applies to ski-equipped aircraft on ice or snow. Not in Motion Deductible: Applies when the aircraft is stationary on the ground.  Endorsements for Aircraft Hull Insurance Coverage Lay-up Endorsement: Refund of premium if the aircraft is unused for extended periods. Conditions: Must be purchased at policy inception. Lay-up reports required within 90 days post-policy expiry. Typically applies for periods of 30+ consecutive days. No refund if a loss exceeds the premium charged. Detached Undercarriage Endorsement: Covers hull ground risks for detached wheels, skis, or floats. Additional premium required if undercarriages aren’t listed as standard configurations. Aviation Liability Insurance: Key Requirements and Coverage Types Liability Requirement: Negligence doctrine governs aircraft owner/operator liability in common law provinces. Proof of financial responsibility required by Air Transport Committee for licensing. Public Liability/Property Damage: Coverage limits based on maximum take-off weight: E.g., $100,000 minimum for aircraft ≤ 1043 kg. $2,000,000 minimum for aircraft between 5670 kg and 34,020 kg. Passenger Liability: Required for aircraft > 2268 kg, with a minimum of $300,000 per passenger seat. Liability Coverage "F": Third-Party Bodily Injury and Property Damage Coverage Scope: Covers bodily injury/property damage to third parties (non-passengers). Includes damage to leased or occupied hangars ($10,000 limit; $1,000 deductible). Emergency Services Extension: Up to $25,000 per occurrence for: Runway foaming for emergency landings. Fire and crash control/rescue services. Search and rescue services. Liability Coverage "G": Passenger Bodily Injury Passenger Bodily Injury Coverage: Covers all legal liabilities for passenger injuries. Includes damage to personal baggage (limit: $1,500 per passenger; $50 deductible). Extensions for Coverage "F" and "G": Emergency First Aid: Coverage for immediate medical assistance. Defense Costs: Covers legal expenses related to defending liability claims. Exclusions in Aviation Insurance Policies War, Seizure, or Hijacking: Losses from acts of war, hijacking, or government seizure are excluded. Exception: Coverage applies if the Canadian government requisitions the aircraft for firefighting. Unapproved Pilot: No coverage if a non-approved pilot operates the aircraft. Approved pilots must have the required license, instrument, and night flying ratings. Exceptions to Unapproved Pilot Exclusion: Aircraft in testing by a Transport Canada pilot. Operation by a pilot providing training to an approved pilot. Ground operation by a qualified, competent individual. Terms and Conditions for Aircraft Insurance Policies Territory Restrictions: Coverage applies only within Canada, the Continental U.S. (excluding Alaska), St. Pierre and Miquelon, Mexico, and the Bahamas. Alaska requires separate underwriting due to claim adjustment costs. Liability coverage in Mexico must be purchased from Mexican insurers. Cancellation Terms: Insurer must give at least 10 days' notice before cancellation. Pro rata premium refund available upon cancellation, except if a loss exceeding the premium has already occurred. Underwriting Aviation Risk Authority Limitations: Brokers typically cannot bind aviation insurance without insurer approval. Pilot’s Record and Report: Essential for underwriting; details pilot’s experience. Includes: Class of license and endorsements. Total hours as pilot in command, broken down by aircraft type. Accident history over the past five years. Rate Determination: No standard hull rates; liability rates are more standardized but may adjust based on report findings.  Carrier Liability Limits: Air carrier liability for cargo is limited by law, similar to marine cargo. Capped by international agreement at $27 per kilogram. Carriers typically purchase Cargo Liability policies to cover legal liability. Valuation: Air Cargo Insurance: Open policies value shipments as invoice price + freight and charges + 10%. Liability, Valuation, Mirrors valuation basis used in marine cargo insurance. Coverage: and Coverage All-risk coverage under Institute Cargo Clause (Air). Similar to marine Institute Cargo Clause (A), covering warehouse- to-warehouse transit. Coverage continues up to 30 days after final discharge (marine policies offer 60 days). Air Cargo Insurance: Exclusions and Rating Exclusions: Standard exclusions for war and strikes. Optional coverage available for additional premium. Rating: No standard rates; premium is based on: Underwriter’s experience and judgment. Competitive forces in the insurance marketplace. Associated Aircraft Exposures: Airport and Employer’s Liability Premises, Property, or Operations Liability (Airport Liability): Covers liability for airport operators or tenants (e.g., repair firms). Excludes refueling, air shows, and air meets. Special questionnaire required for coverage of excluded activities. Employer’s Liability: Needed in provinces where aviation is excluded from Workers’ Compensation Act. Covers: Pilots Ground Crew Clerical Staff Typically limited to in-flight risks; ground risks can be added. Associated Aircraft Exposures: Products and Hangarkeeper’s Liability Products Liability: Covers legal liability for selling aviation products/services. Relevant for businesses engaged in refueling, repairs, or aircraft overhaul. Hangarkeeper’s Liability: Covers liability for loss/damage to aircraft in the insured’s care, custody, or control. Applies to aircraft in repair, storage, or overhaul. Associated Aircraft Exposures: Cargo and Non-Owned Liability Cargo Liability: Covers legal liability for loss/damage to goods in the carrier’s care. Protects against claims for third-party cargo under transport or storage. Non-Owned Liability: Covers liability for businesses whose employees use aircraft they don’t own. Suitable for individuals or businesses renting or borrowing aircraft. Associated Aircraft Exposures: Contingent Liability Contingent Liability: Covers businesses that may charter, rent, or borrow aircraft. Excludes coverage when the aircraft is operated by the insured or an employee. Checkpoint Challenge Questions?