HISTORIC PRESS RELEASE : Government offers airlines choice of cover for terrorism and war insurance [October 2001]
The press release issued by HM Treasury on 30 October 2001.
From 1 November, UK airlines will be able to choose between commercial and government-backed insurance for third party liability for terrorism and war risks.
The Government announced on 22 October that it would renew the scheme set up to fill the gap in the commercial insurance market to ensure that UK airlines could continue to fly in the wake of events in the United States last month. The Government intended that from 1 November airlines would find commercial cover for the first $100m, with the Government backed Troika scheme providing cover for liabilities above $100m. However the planned increase in commercial cover is not becoming available as fast as originally hoped, and cover above $50m is only available from a limited number of providers.
Airlines will therefore be offered the following choice from 1 November:
To purchase the commercial cover for liabilities up to $100m. The Government backed Troika scheme will provide cover above that level and waive the premiums until midnight on 24 November, or
To retain cover under the Troika scheme for all liabilities above $50m. Premiums for this cover are currently waived, but the Government will start charging from 8 November, in line with European Commission guidelines.
The current 30 day scheme expires on 24 November. The Government intends to renew the scheme but will introduce commercial charges for all the airlines covered by Troika, informed by consultation with the industry about the most appropriate basis for charging.
Chief Secretary Andrew Smith said:
“We are taking a pragmatic view which aims to give airlines flexibility to choose the most appropriate insurance option for them. The Government’s objective remains to withdraw from the market as soon as practicable. However commercial cover is not yet available across the board for third party liability up to $100m. Therefore the Government is ensuring an option is available for all airlines through Troika, in addition to the commercial insurance available.”
