Like other insurance lines, aviation insurance also excludes damage caused in connection with war and terrorism.

The specific definition in the insurance policies says that there is no cover for claims caused by

  • war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution insurrection, material law, military or usurped power or attempts at usurpation of power.

  • any hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

  • strikes, sabotage, confiscation, hi-jacking etc.

In addition, all insurance payments are subject to the various sanction regulations – please see our separate information on sanctions.

In addition to this general exclusion referring to damage occurred, there exists clause LSW617 that restricts the validity of cover itself: there is generally no cover for various named high-risk and existing crisis and war zones. This stipulation, however, allows overflights in international corridors as well as landings of aircraft in emergency situations.

In compulsory aviation liability insurance, however, consequential damage in the case of war and terrorism is covered according to Article 7 of Regulation (EC) No. 785/2004, but this is limited with the statutory minimum liability amount.

By way of the international clause AVN52 there is the possibility to buy cover or to increase the limit of indemnity for war and terror risk in aviation liability insurance; this applies to general aviation as well as airports, ATC or product liability.

War risk extension for aircraft hull insurance is, in principle, also available.

Coverage in both lines – liability and hull – includes the risk of war and terrorism with extension to strike, sabotage, as well as seizure or unlawful takeover (hijacking) of the aircraft, etc., but it excludes any hostile explosion of a weapon of war using atomic or nuclear fission and/or fusion or any other similar reaction or radioactive radiation.

In the event of a crisis/war, there are thus several factors to consider:

    • Extension of LSW617:the above-mentioned clause limiting the insurance coverage in the geographical area can be extended to additional countries at any time.

    • Closure of the airspace: notified by governments or authorities – no insurance cover is provided for the respective area, neither for take-offs/landings nor overflights.

    • Cancellation of AVN52 (liability) and hull war coverage (e.g. LSW555): The agreed extension can be terminated at any time with 7 days’ notice. The termination option is also open to the policyholder.

    • Partial termination of AVN52 with 48 hours’ notice: The insurer may terminate one or more parts of the clause with 48 hours’ notice in the event of hostile detonation of nuclear or nuclear fission weapons of war.

  • Automatic termination of AVN52: In case of war between two or more explicitly named states (e.g. Russian Federation, USA, France, UK, etc.).

The following additional limitations that represent a significant impairment and impact of financial nature must be considered:

  • Suspended flights to Russian regions and to the Ukraine

  • airspace closure in the crisis area for all aircraft

  • losure of European airspace for Russian aircraft

This leads to the change of flight routes in all areas, especially from Western Europe to the Far East (China, Japan, etc.) and thus to longer flight times, higher fuel consumption, additional costs for overflight rights for areas and states otherwise not overflown.

Source:  Ilse Konheisner-Holub; Cover aspects in aviation insurance in respect of war and terrorism (March 1st, 2022), URL: https://www.greco.services/en/news/aviation-insurance-war.html (March 7th, 2022)