Ottawa extends insurance relief to air carriers

OTTAWA (Feb. 4, 2002) — The federal government will extend insurance-relief for air carriers in Canada for another 45 days.

Ottawa initially announced a 90-day indemnification for third-party aviation war risk liability on Sept. 22, 2001. It has been extended twice. The latest extension expires March 21. The offer applies to Canadian air carriers, airports, NAV CANADA, the Air Transport Security Corp., and other essential service providers at airports, such as ground handlers and re-fuellers.

“Since the previous extension, the insurance market has not yet recovered sufficiently to provide commercially acceptable coverage,” Transport Minister David Collenette said in a statement. “The Government of Canada will continue to monitor efforts in the aviation industry to develop a longer-term solution, and will consider the need for further support after the current indemnity expires.

“However, the government’s intervention in the insurance market is temporary, and industry stakeholders must continue to work towards a longer-term commercial solution.”

The federal government said it is responding to the decision by international insurers to withdraw previous levels of third-party aviation war-risk liability coverage which were available before Sept. 11, 2001.

The government’s offer of war risk liability indemnity applies specifically to companies that already had such coverage at the time of cancellation; and only to the limit of the amount covered under the insurance policy immediately before the effective cancellation time, less whatever coverage is commercially available during the period of extension.