Commission proposal will make aircraft insurance obligatory

BRUSSELS – The European Commission yesterday unveiled a draft regulation proposing increased insurance coverage against all kinds of damage that passengers, their luggage, cargo, as well as any persons present on the site of a crash, as well as their properties, may incur. The Commission proposal «incorporates into EU law the main rules foreseen in various international conventions (and) introduces minimum insurance requirements for all air carriers and aircraft operators flying within, into, out of or overflying the European Union,» the Commission said in a press release. Specifically, all air carriers must be insured for a minimum amount of 250,000 Special Drawing Rights (SDRs), currently worth 334,500 euros, per passenger, «to cover their liability for death, wounding or any other bodily injury sustained by a passenger… Such insurance will also cover damage sustained in the case of destruction or loss of, or damage to checked baggage of a passenger.» They must also be insured for a minimum of 17 SDRs (22.75 euros) per kilo of cargo to cover liability for destruction, damage, or loss during the flight, and also provide insurance for damage sustained by third parties in the event of accidents, as well as acts of war and terrorism. The only existing international convention covering third-party liability is the Rome Convention, signed in 1933 and amended in 1952 and 1978. In contrast to the proposed regulation, it does not cover acts of war and terrorism. A number of countries, including Greece, have never ratified the Rome Convention. Insurance coverage against third-party liability (for example, property owners who sustained damage as a result of a plane crash) will be calculated according to the aircraft’s size. The Commission leaves it to individual member states to set the minimum insurance requirements for mail carriage by air carriers or aircraft operators. The Commission proposal clearly extends current provisions for minimum insurance, significantly increasing minimum amounts and making insurance payments obligatory. In current practice, insurance payments are dependent on how robust an air carrier’s finances are. The proposed regulation, which must be approved by all 15 member states before taking effect, explicitly demands that members enforce and monitor its application. In other words, they must make certain that air carriers or aircraft operators are insured to the minimum required amounts. If this is not so, member states must prevent the uninsured aircraft from crossing their airspace or taking off in case it has already landed. Any member state shown to have been lax in its monitoring may be taken to the European Court.

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