Canadian government addresses air industry insurance issue

Canada’s government will provide an indemnity for third-party war and terrorism liabilities for essential aviation service operators in Canada, says Transport Canada.

“The Government of Canada has decided that, for a limited period, it will support the industry where commercial coverage will no longer be available. Without this coverage, many key aviation services would be unable to continue operation,” said Transport Minister David Collenette.

This offer will apply to Canadian air carriers, airports, NAV Canada, the Air Transport Security Corporation and other essential service providers at airports, such as ground handlers and re-fuellers, up to a maximum of 90 days.

This indemnity will apply only to those entities that already carry such coverage and only to the limits of their existing terms and conditions; and the portion of existing coverage that will not be offered in commercially available insurance policies.

Air Canada Corp. has about $1.5-billion in third-party liability insurance, while Toronto’s Lester B. Pearson International Airport is indemnified for about $one-billion. Coverage for smaller airports is $500-million, and NAV Canada’s risk insurance is said to be near $two-billion.

“The industry will continue to work with insurance underwriters over the period ahead to find a commercial answer to this question. Thanks to the efforts of officials in Transport Canada and other government departments we have some additional time to reach such a resolution. In the meantime, we will continue to focus our attention on providing the travelling public with safe and smooth transit through Canada’s airports,” said The Canadian Airports Council’s Executive Director Neil Raynor.