31 January 2011
Loss of business caused by natural phenomena such as volcanic ash clouds will become insurable for the first time, aviation insurer Swiss Re has announced.
It is launching a product that will cover “non-damage business interruption” losses. The insurable causes of disruption can include atmospheric ash, the results of seismic activity such as earthquakes, and meteorological phenomena such as floods, storms and snow, Swiss Re Director, Oliver Dlugosch, told delegates at the JLT Aviation Insurance Conference in Dubai on 27 January 2011.
Mr Dlugosch emphasised that the cover will only be for the business losses caused by the phenomena, not any physical damage that may be caused, and that cover is not being offered for business losses caused by war, pandemics or global positioning satellite (GPS) failure.
The cost of cover will depend on how much risk the customer airline is prepared to take on itself. For example, it would be cheaper if the airline were to agree to be covered only for losses resulting from a disruption that continued beyond six days, or for the losses owing to flight cancellations beyond an agreed threshold.
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