Attempt this previous-year question. The correct option stays hidden until you choose.
Which of the following statements about insurance in aviation sector is/are correct ?
1. 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment.
2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.
Select the answer using the code given below :
Pick an option to check yourself.
Approach: Analyze the scope of aviation insurance coverage and the legal framework governing international air carrier liability to determine the accuracy of the provided statements.
- **Correct Answer:** (c) Both 1 and 2
- **Statement 1 is correct:** Aviation Hull Insurance is a specialized policy that protects the aircraft owner or operator against physical damage to the aircraft. It covers the hull (body), engines, and all integrated on-board equipment, protecting the asset from risks like ground accidents, crashes, or fire.
- **Statement 2 is correct:** The Montreal Convention (1999) establishes a two-tier liability system for international air carriers.
- It mandates 'strict liability' for proven damages up to a certain threshold (Special Drawing Rights), meaning the airline must pay compensation for death or injury regardless of whether they were at fault.
- It simplifies the legal process for passengers' families by removing the burden of proving airline negligence for initial claims.
- India is a signatory to this convention, which replaced the older Warsaw Convention system.
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