After a series of meetings with airlines and the insurance industry, Britain’s Treasury Department has agreed to extend the emergency insurance program for the country’s air carriers and service providers until March 20.
The coverage, put in place following the Sept. 11 attacks, provides protection for the airline industry in excess of the coverage from private insurers, which has been limited to $50 million per plane in third party coverage. The scheme was due to expire on Wednesday.
Without the emergency coverage, the airlines would have been in breach of many aircraft leasing and financing contracts, which require third party coverage well above $500 million. The insurers withdrew coverage with these limits following the losses from the WTC attacks, which made assessing the risk factors involved from potential terrorist attacks almost impossible to calculate.
The government indicated that its emergency plan, named Troika, should be replaced as soon as it was possible to do so by obtaining commercial policies, but so far the what cover there is available is prohibitively expensive.
Aviation brokers and leading insurers have been in talks with governments in the U.S., the European Union and Asia in hopes of establishing an international coverage plan for the airlines, but so far no definitive proposals have been adopted. The only alternative, for now, remains excess coverage by individual countries.
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