AVIATION POLICY- AN OVERVIEW

AIRCRAFT HULL / LIABILITY POLICY

Whereas the insured named in the Schedule hereto has made or caused to be made to _____ (hereinafter called "The Company") a written proposal dated as stated in the Schedule of this policy and warranting the truth of the statements contained therein which is the basis of this Contract and is deemed to be incorporated herein and has paid or agreed to pay to the Company the premium stated in the Schedule of this policy (hereinafter referred to as the "Schedule"), for the insurance of the risks as shown in the Schedule, during the period specified in the Schedule and any extensions of such period as may be agreed by the Company upon payment of renewal premium.

Now this Policy Witnesseth that subject to terms, exclusions, definitions and conditions contained herein or endorsed or otherwise expressed hereon, the Company will indemnify the Insured as follows, the insurance being applicable to only those Sections against which a premium has been shown in Part I of the Schedule.

SECTION 1 - LOSS OR DAMAGE TO THE AIRCRAFT

1. The Company will at its option pay for replace or repair, accidental loss or damage to the aircraft (hereinafter defined) described in the Schedule arising from the risks covered including disappearance if the aircraft is unreported for 60 days after the commencement of flight (hereinafter defined).

2. The Company will in addition pay:

(a) In the event of aircraft (if insured herein for risks of flight) through force majeure alighting in any place from which it is unable to take off again, the reasonable cost of dismantling the aircraft, removal to the nearest aerodrome / repair agency and reassembling even if the aircraft has sustained no damage and also pay reasonable emergency expanses necessarily incurred by the insured for the immediate safety of the aircraft.

(b) In the event of damage to the aircraft as covered by this policy, the reasonable expenses incurred by the Insured with the written consent of the Company in respect of:

(i) Maintenance of watch on the damaged aircraft and safeguarding it from further loss or damage.

(ii) If Insured herein for risk of flight, the necessary test flight and

(iii) Such proportion of the cost of obtaining a new Certificate of Airworthiness as shall apply to the period from the date of accident to the date of expiry of the current Certificate of Airworthiness.

The total liability of the Company in respect of 2 (a) and 2 (b) above shall not exceed 10% of the Total Agreed Value as shown in Part II of the Schedule or Rs.5,00,000 (Rupees Five Lacs only) whichever is less.

3. THE COMPANY SHALL NOT BE LIABLE FOR

(a) Wear and tear, deterioration, breakdown, defect or failure howsoever caused in any Unit (hereinafter defined) of the aircraft and the consequences thereof within such Unit.

(b) Damage to any Unit by anything, which has a progressive or cumulative effect, but damage attributable to a single recorded incident is covered under Para I above.

However, accidental loss of or damage to the aircraft consequent upon 3 (a) or 3 (b) is covered under Para 1 of the Section.

If the damage to the aircraft is repaired by the Insured, the cost of repairs shall be the actual landed cost to the Insured at the site/s of repairs of the necessary materials and parts, plus the actual cost of labour plus a reasonable charge for overheads not exceeding however 20% of the actual cost of material and parts. If any firm other than the Insured effects repairs, the cost of repairs shall be the actual amount of the repairer's invoice increased by the reasonable expenses incurred by the Insured with the written consent of the Company for supervising the repairs. The cost of transportation shall be limited in all cases to the least expensive method of transporting.

Except where the company exercises its option to pay for or replace the aircraft, there shall be deducted from the claim under Para I of this Section:-

(a) The amount specified in the part IV (B) of the Schedule and

(b) Such proportion of the cost of any repaired/replaced or the overhaul cost (hereinafter defined) of any Unit (hereinafter defined) repaired or replaced as the used time bears to he total life/overhaul Life (hereinafter defined) the part's of the unit.

4. The liability of the company under this Section shall not exceed in all in respect of any aircraft, the value sated in Part II column (9) of the Schedule against such aircraft less any amount to be borne by the Insured.

5. In the event of the company exercising its option to replace aircraft, the replacement aircraft shall be of the same make and type and reasonably like condition unless other wise agreed with insured. The aircraft shall at all times remain the property of the Insured who shall have no right of abandonment to the Company. In the event of payment of a total loss or replacement of the aircraft by the company under the terms of the Policy, the Company may at its option elect to take over the remains of the aircraft (together with all documents of record, registration and title hereto) as salvage. The cover afforded by this Section I of the Policy is terminated in respect of the aircraft, even if the Aircraft is retained by the Insured for valuable consideration or otherwise.

6. No claim shall be payable under this Section if other Insurance which is payable in consequence of loss or damage covered under this section has been or shall be effected by or on behalf of the insured without the written consent of the company.

SECTION II - THIRD PARTY LIABILITY

1. The company will indemnify the insured for all sums, which the insured shall become legally liable to pay and shall pay as compensatory damages (including cost awarded against the insured) in respect of bodily injury (fatal or otherwise) and accidental damage to property caused by aircraft or by any person or object falling therefrom.

Exclusions applicable to this Section only :

2. The company shall not be liable for claims arising from:

(a) injury (fatal or otherwise) or loss sustained by any director or employee of the insured or partner in the insured's business whilst acting in the course of his employment with or duties for the insured.

(b) injury (fatal or otherwise) or loss sustained by any member of the flight, cabin or other crew whilst engaged in the operation of the Aircraft.

(c) injury (fatal or otherwise) or loss sustained by any passenger whilst entering, onboard, or alighting from the Aircraft.

(d) loss or damage to any property or bodily injury (fatal or otherwise) to animals belonging to or in the care, custody or control of the insured.

(e) any member of the household or family of the insured.

(f) any sub-contractor of the insured or any agent or servant of the insured while such person is engaged in his duties as such or any other person claiming by virtue of any contract with the insured.

3. (A) The Company shall not be liable for claims directly or in-directly occasioned by, happening through or in consequence of :-

(a) noise (whether audible to the human ear or not), vibration, sonic boom and any phenomena associated therewith.

(b) pollution and contamination or any kind whatsoever.

(d) interference with the use of property;

unless caused by or resulting in a crash, fire, explosion or collision, or a recorded in flight emergency causing abnormal Aircraft operation.

(B) With respect to any provision in the policy concerning any duty of the Company to investigate or defend claims, such provisions shall not apply and the Company shall not apply and the Company shall not be required to defend.

(a) claims excluded by Paragraph (A) or

(b) a claim or claims covered by the Policy when combined with any claims excluded by Paragraph (A) (referred to below as "Combined Claims")

(C) In respect of any Combined claims, the Company shall (subject to proof of loss and the limits of the Policy) reimburse the Insured for that portion of the following items which may be allocated to the claim or claims covered by the Policy:

(a) damage awarded against the Insured and,

(b) defence fees and expenses incurred by the Insured.

(D) Nothing herein shall override any radioactive contamination or other exclusion clause attached to or forming part of this policy.

(Noise and Pollution and other perils exclusion clause - AVN 46-B 01.10.1996)

Limits of Indemnity applicable to this Section

4. The liability of the Company under this Section shall not exceed the amounts stated in Part IV(C) of the Schedule, less any amount under Part IV(B). The Company will defray in addition to any legal cost and expenses incurred with their written consent in defending any action which may be brought against the Insured in respect of any claim for compensatory damages covered by this section, but should the amount paid or awarded in settlement of such claim exceed the limit of indemnity then the liability of the Company in respect of such legal costs and expenses shall be limited to such proportion of the said legal costs and expenses as the limit of indemnity bears to the amount paid for compensatory damages.

SECTION III PASSENGER LIABILITY

Coverage :

1. The company will indemnify the Insured in respect of all sums which the Insured shall become legally liability to pay and shall pay, as compensatory damages (including costs awarded against the insured) in respect of :

(a) accidental bodily injury (fatal or otherwise) to passengers whilst entering, on board, or alighting from the Aircraft and;

(b) loss of or damage to baggage and personal articles of passengers arising out of an accident to the Aircraft.

Provided always that :

(i) before a passenger boards the Aircraft the insured shall take such measures as are necessary to exclude or limit liability for claims under (a) and (b) above to the extent permitted by the law.

(ii) if the measures referred to in the provide (i) above include the issue of a passenger Ticket / Baggage Check, the same shall be delivered correctly completed to the passenger at a reasonable time before the passenger boards the Aircraft.

In the event of failure to comply with proviso (i) or (ii) limit of indemnity by the Company under this section shall not exceed the amount of legal liability, if any, that would have existed had the proviso been complied with,

Exclusions applicable to this section only :

2. The Company shall not be liable for injury or loss sustained by any :

(a) director or employee of the Insured or partner in the Insured's business whilst acting in the course of his employment with or duties for the insured.

(b) member of the flight, cabin, or other crew whilst engaged in the operation and or maintenance of the Aircraft.

Limits of Indemnity applicable to this Section :

3. The liability of the Company under this Section shall not exceed the amount stated in part IV (C) of the Schedule, less any amount under Part IV (B). The Company will defray in additional to any legal costs and expenses incurred with their written consent in defending any action which may be brought against the Insured in respect of any claim for compensatory damages covered by this Section, but should the amount paid or awarded in settlement of such claims exceed the limits of indemnity then the liability of the company in respect of such legal costs and expenses as the limit of indemnity bears to the amount paid for compensatory damages.

WARRANTY - APPLICABLE TO ALL SECTIONS

The Insured shall at all times comply with all air navigation and airworthiness orders and requirements issued by any competent authority affecting the safe operation of the Aircraft and shall ensure that :

(a) the Aircraft is airworthy at the commencement of each flight.

(b) all Log Books and other records in connection with the Aircraft which are required by any official regulation in force from time to time shall be kept up to date and shall be produced to the company or their Agents on requests

GENERAL EXCLUSIONS (APPLICABLE TO ALL SECTIONS OF THE POLICY)

The Company shall not be liable to indemnify under any Section of this Policy any direct or indirect loss/damage or liability or expenses however caused :

1. Whilst the Aircraft is being used for any illegal purpose or for any purpose or purposes other than those stated in the Schedule.

2. Whilst outside the geographical limits named in the Schedule unless due to force majeure.

3. Whilst the Aircraft is being piloted by any person other than as stated in the Schedule except that the Aircraft may be operated on the ground by any person competent for that purpose.

4. Whilst the Aircraft is being transported by any means of conveyance except as a result of an accident giving rise to a claim under Section I of this Policy.

5. Whilst the Aircraft is using unlicenced landing area unless due to force majeure or covered by special endorsement hereon.

6. Due to or arising out of or directly or indirectly connected with :

(a) the use of the Aircraft for racing, record attempts, speed trials, any form of competitive flying, aerobatics, aerial seeding of fertilization or crop dusting or spraying, petrol, fire fighting, hunting, shooting herding, fish spotting or any other form of flying involving abnormal hazards unless covered by a special endorsement.

(b) experimenting with or testing new parts (other than replaced parts) new devices or new designs unless agreed to by the Company.

7. Due to liability assured by the insured under any agreement other than an approved contract of carriage under Section 111 hereof except to the extent that may such liability would have attached to the Insured in the absence of such agreement.

8. Whilst the total number of passengers carried in the Aircraft at the time of the happening of such bodily injury loss or damage or liability exceeds Declared Passenger Seating Capacity stated in Part 11 Column (3) of the Schedule.

9. Which at the time of its/their happening in insured or, but for the existence of this Policy, would be insured by any other Policy or Policies had this insurance not been effected.

10.(1) This policy does not cover :

(i) Loss of or destruction of or damage to any property whatsoever or any loss or expense whatsoever resulting or arising there from or any consequential loss.

(ii) Any legal liability of whatsoever nature.

Directly or indirectly caused by or contributed to by arising from :

(a) The radioactive, toxic, explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof;

(b) The radioactive properties of, or a combination of radioactive properties with toxic, explosive or other hazardous properties of, any other radioactive material in the course of carriage as cargo, including storage or handling incidental thereto;

(c) Ionizing radiations or contamination by radioactivity from, or the toxic, explosive or other hazardous properties of, any other radioactive source whatsoever.

(2) It is understood and agreed that such radioactive material or other radioactive source in paragraph (1) (b) and (c) above shall not include :

(i) Depleted Uranium and natural Uranium in any form;

(ii) Radioisotopes which have reached the final stage of fabrication so as to be usable for any scientific, medical, agricultural, commercial, educational or industrial purpose.

(3) This policy, however, does not cover loss or destruction of or damage to any property or consequential loss or any legal liability of whatsoever nature with respect to which :

(i) The insured under this policy is also an insured or an additional insured under any other insurance policy, including any nuclear energy liability policy; or

(ii) Any person or organization is required to maintain financial protection pursuant to legislation in any country; or

(iii) The insured under this policy is, or had this policy not been issued would be entitled to indemnification from any government or agency thereof.

(4) Loss, destruction, damage, expense or legal liability in respect of the nuclear risks not excluded by reason of paragraph (2) shall (subject to all other terms, conditions, limitations, warranties and exclusions of : this policy) be covered, provided that :

(i) In the case of any claim in respect of radioactive material in the course of carriage as cargo, including storage or handling incidental thereto, such carriage shall in all respects have compiled with the full international Civil Aviation Organization "Technical Instructions for the Safe Transport of Dangerous Goods by Air", unless the carriage shall have been subject to any more restrictive legislation, when it shall in all respects have compiled with such legislation :

(ii) This policy shall only apply to an incident during the period of this policy and where any claim by the Insured against the Insurers or by any claimant against the Insured arising out of such incident shall have been made within three years after the date thereof;

(iii) In the case of any claim for the loss of or destruction of or damage to or loss of use of an aircraft caused by or contributed to by radioactive contamination, the level of such contamination shall have exceeded the maximum permissible level set out in the following scale;

Emitter Maximum permissible level of non-fixed radioactive

surface contamination (Averaged over 300 cm²)

(IAEA Health and Safety Regulations in accordance with the current ICAO Technical Instructions for the Safe Transport of Dangerous Goods by Air )
Beta, gamma and low toxicity alpha emitters		Not exceeding 4 Bequerels/cm² (10⁴ microcuries)/cm²
All other alpha emitters		Not exceeding 0.4 Bequerels/cm² (10⁵ microcuries)/cm²

(iv) The cover afforded hereby may be cancelled at any time by the Insurers giving seven day's notice of cancellation. (AV-38B/22.7.96)

11. By war, hi-jacking and other similar perils as listed below :

(a) War, invasion, acts of foreign enemies, hostiles (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempt at usurpation or power.

(b) Any hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive fore or matter.

(d) Any act of one or more persons, whether or not agents or a sovereign power, for political or terrorist purposes and whether the loss or damage resulting therefrom is accidental or intentional.

(e) Any malicious act or act of sabotage.

(f) Confiscation, nationalization, seizure, restraint, detention, appropriation, requisition for title or use by or under the order of any Govt. (whether civil military or de facto) or public or local authority.

(g) Hi-jacking or any unlawful seizure or wrongful exercise or control of the Aircraft of crew in flights (including any attempt at such seizure or control) made by any person or persons on board the Aircraft acting without the consent of the insured.

Furthermore this Policy does not cover claims arising whilst the Aircraft is outside the control of the Insured by reason of any of the above perils. The Aircraft shall be deemed to have been restored to the control of the Insured on the safe return of the Aircraft to the Insured at an Airfield not excluded by the geographical limits of this policy and entirely suitable for the operation of the Aircraft (such safe return shall require that the Aircraft be parked with engines shut down and under no duress).

(AVN-48B/1.10.96)

DEFINITIONS (IN ALPHABETICAL ORDER)

"ACCIDENT" means any one accident or series of accidents arising out of one event.

"AIRCRAFT" shall mean the aircraft specified in the Schedule hereto together with the engine (s) and standard instrument's and equipment including any extra equipment or accessories the value of which is specifically mentioned in the schedule.

"BUSINESS" means the uses stated in "PRIVATE PLEASURE" and used for the purpose of the Insured's business or profession but Not used for hire or reward.

"COMMERCIAL" means the uses stated in "PRIVATE PLEASURE" and

"BUSINESS" and used for the carriage by the Insured of passengers, baggage accompanying passengers and cargo for hire or reward.

"FLIGHT" means from the time the Aircraft move forward in taking off or attempting to take off, whilst in the air, and until the aircraft completes its landing run.

"GROUND" shall be deemed to include all periods during which the aircraft is not in flight, Taxying or moored.

"MOORED" means, in the case of aircraft designed to land on water, whilst the aircraft is afloat and is not flight or taxying as defined, and includes the risks of launching and hauling up.

"OVERHAUL COST" means the costs of labour and materials which would be incurred in overhaul or replacement (whichever is necessary) at the end of the Overhaul Life of the damaged or a similar Unit.

"OVERHAUL LIFE" means the amount of use, or operational and / or calendar time which according to the Airworthiness Authority, determines when overhaul or replacement of a Unit is required.

"PRIVATE PLEASURE" means use for private and pleasure purpose but NOT used for any business or profession nor for hire or reward.

"RENTAL" means rental, lease, charter or hire by the Insured to any person, company or organization for "PRIVATE PLEASURE" and "BUSINESS" uses only, where the operation of the Aircraft is under the control of the Insured. Rental for any other purposes is NOT insured under this Policy unless specifically declared to and agreed by an endorsement to this Policy.

”TAXYING" shall be deemed to include all movement of the aircraft under its own power other than for the purpose of flight, Taxying shall not be deemed to cease merely reason of the temporary halting of the aircraft in the course of taxying from one point to another.

”UNIT" means a part or an assembly of parts (including any sub-assemblies) of the aircraft which has been assigned on Overhaul Life as a part or an assembly. Nevertheless, an engine complete with all parts normally attached when removed for the purpose of Overhaul or replacement shall together constitute a single Unit.

CONDITIONS

1. The due observance and fulfillment of the warranties, terms, provisions, conditions, clauses mentioned in Part V of the Schedule and endorsements of this Policy shall be conditions precedent to any liability of the Company to make any payment under this Policy.

2. Immediate notice by the speediest possible means shall be given to the Company of any event likely to give rise to a claim under this policy and insured shall immediately thereafter furnish full particulars in writing of such event and shall forward to the Company immediately notice of any claim by a Third Party or Passenger and any letters or documents relating thereto and shall also given notice to the Company of any impending prosecution. In all case, the Insured shall render such further information and assistance as the Company may reasonably require and shall not act in any way to the detriment or prejudice of the interest of the Company.

3. The Insured shall use due diligence and do and concur in doing everything reasonably practicable to avoid or diminish any loss thereon but shall not make any admission of liability or payment or offer or promise of payment without the written consent of the Company.

4. In the event of the Aircraft sustaining damage whether covered by this policy or note, the Insured or his agent(s) shall forthwith take such action as may be necessary to ensure the safety of the damaged Aircraft and its equipment and accessories. No dismantling or repairs shall be commenced without the written consent of the Company excepting such as may be necessary in the interests of safety and to prevent further damages.

5. The Company shall be entitled at any time and for so long as it desires to take absolute control of all negotiations and proceedings and in the name of the insured to settle or defend or pursue any claim. The company may at any time upon giving written notice to the Insured abandon the pursuit or the defence of any claim which it has undertaken but shall in such case (exception the case of fraud or concealment on the part of the Insured) be liable for any costs incurred in connection with such pursuit or defence upto the date of the giving of such notice.

6. Should there be any change in the circumstances or nature of the risk which are the basis of this contract the Insured shall give immediate written notice thereof to the Company. No claim arising subsequent to such change shall be recoverable hereunder unless such change has been accepted in writing by the Company.

7. If the Insured shall make any claim knowing the same to be false or fraudulent as regards amount or otherwise this Policy shall become void and all claims there under shall be forfeited.

8. No waiver of any of the terms, provisions, conditions and endorsements of this policy shall be valid unless made in writing signed by a person duly authorised by the Company to do so.

9. The Company may cancel this policy at any time by giving the insured 10 days notice in writing of such cancellation addressed at his last known address. In such event the company will return to the insured in respect of the unexpired period, a pro-rata portion of the premium.

The policy may be cancelled at any time by the Insured on giving the company 10 days notice in writing and provided no claim has arisen during the period of Insurance, the insured shall be entitled to a return of the premium as per scale listed below :

Period Policy has been in force	Amount of refund due to the insured (as percentage of annual premium)
Up-to 1 month (30 days)	80 (Eighty)
More than 1 month and up-to 2 months	70 (Seventy)
More than 2 month and up-to 3 months	60 (Sixty)
More than 3 month and up-to 4 months	50 (Fifty)
More than 4 month and up-to 5 months	40 (Forty)
More than 5 month and up-to 6 months	30 (Thirty)
More than 6 month and up-to 7 months	25 (Twenty five)
More than 7 month and up-to 8 months	20 (Twenty)
More than 8 month and up-to 9 months	15 (Fifteen)
More than 9 months	No refund

10. Any duly authorised representative of the Company shall be permitted to examine the aircraft insured at all reasonable time during the currency of this Policy.

11. If any dispute or difference shall arise as to the quantum to be paid under the Policy (liability being otherwise admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any party invoking arbitration the same shall be referred to a panel of three arbitrators, comprising of two arbitrators, one to be appointed by each of the parties to the dispute / difference and the third arbitrator to be appointed by such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the Arbitration and conciliation Act 1996.

12. It is also hereby further expressly agreed and declared that if the Company shall disclaim liability to the Insured for any claim hereunder, and such claim shall not, within twelve calendar months from the date of such disclaimer had been made the subject of a suit in a court of law, then the claim shall for all purpose(s), be deemed to have been abandoned and shall not thereafter be recoverable hereunder.

13. When two or more aircraft are insured hereunder, the terms of this Policy apply separately to each.

14. Upon an indemnity being given or a payment being made by the company under this policy, they shall be subrogated to the rights and remedies of the insured who shall co-operate with and do all things necessary to assist the company to exercise such rights and remedies.

15. This Policy shall not be assigned in whole or in part except with the consent of the company verified by endorsement hereon.

SCHEDULE

(THIS POLICY PROVIDES COVER ONLY FOR THOSE SECTIONS AGAINST WHICH A PREMIUM IS SHOWN IN PART 1 OF THIS SCHEDULE)

PART I

Policy No.		Annual Premium
The Insured:		Section I: Rs.
Address:		Section II: Rs.
Period of Insurance: From: 00:00Hrs To		Section III: Rs.
Date of Proposal:		Total: Rs.
		Service Tax: Rs.
		Total: Rs.

PART II

DESCRIPTION OF AIRCRAFT						Value (Rs)
Air Frame					Engine	Value (Rs)
Make Type & Series No.	Year of Construction	Passenger capacity (Licensed)	Seating (Declared for this Insurance)	Registra tion / Identification Marks	Number And Type	Aircraft with Standard instruments and equipment	Extra equipment and accessories fitted to or carried in the aircraft	Total Agreed
1	2	3	4	5	6	7	8	9

Risks covered- Flight, Taxying and Ground (for each aircraft)

PART III

1. Pilots:

2. Purpose for which the Aircraft will be used –

3. Geographical limits within which the Aircraft will be flown:

PART IV Limits And Deductible

POLICY SECTION (A)	AMOUNTS TO BE DEDUCTED (B)		LIMITS OF INDEMNITY FROM WHICH MUST BE DEDUCTED THE AMOUNT IN COLUMN (B) (C)
I. Loss or damage to Aircraft listed in Part II of this schedule			As per Part II Column (9)
II. Liability to Third parties	Bodily Injury Property Damage	Nil Nil	Bodily Injury Property Damage	Each Aircraft Rs. One crore
III. Liability to Passengers	Bodily Injury	Nil	Rs. Nil Rs. Nil	Each person Each accident
III. Liability to Passengers	Baggage	Nil	Rs. Nil Rs. Nil	Each person Each accident

PART V CLAUSE ATTACHED TO THE POLICY AND TO WHICH THE POLICY IS SUBJECT TO:

CLAUSE NO. TITLE OF THE CLAUSE

GENERAL INSURANCE IN INDIA

Tuesday, 19 March 2013

AVIATION

AVIATION POLICY- AN OVERVIEW

AIRCRAFT HULL / LIABILITY POLICY

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HEALTH INSURANCE OUTPACES MOTOR INSURANCE IN INDIA