According to a report from Reuters News Agency, insurers in the London market, including Lloyd’s, have given the airlines they insure notice that coverage for war risks and terrorist attacks will no longer be effective as of next Monday, and that they should expect significant increases to reacquire it.
The announcement came nine days after the terrorist hijacking of four airliners in the U.S., and adds another severe blow to the already crippled airline industry. A Lloyd’s spokesman indicated that coverage would rise by “hundreds of a percent.”
Another spokesman told Reuters, however, that the industry had no intention of taking away coverage that the airlines need to operate, and that the London market was working out ways to extend new coverage. Insurers would remain open over the weekend if necessary in order to work out the new terms said the report.
The cancellations follow Tuesday’s announcement of big increases in premiums for marine coverage of war and terrorist risks, especially for oil tankers (See IJ Website Sept.18).
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