McGill and Partners, the independent global specialty insurance and reinsurance broker, in partnership with certain carriers in the London market, has launched a bespoke aviation insurance solution that addresses significant, unmitigated risk within the aviation sector. Coverage is specifically designed to protect aviation spares against war perils while on the ground – filling a crucial coverage gap in traditional policies.
Historically, aviation hull war policies have only covered spares for war perils while they are in transit by sea or air, leaving ground-based assets exposed. With no existing protection against war perils on the ground, airlines and lessors are exposed to significant financial loss. With individual aircraft engine values approaching USD 50 million, the absence of ground-based war peril coverage creates a direct and material risk to the balance sheets of both airlines and lessors for these multi-million-dollar assets.
McGill and Partners’ new policy is designed to provide ground-based war coverage and protection for spares and equipment located on the ground and not in transit by sea or air. It provides war perils coverage for physical loss or damage resulting from war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power. The solution will have defined limits with a sum insured per item, subject to a defined annual aggregate limit.
The announcement comes at a particularly crucial time for the market, with conflict in the Middle East, in particular seeing airports acting as key targets for those actors involved.