Contingent hull and liability coverage

The best maintained airline insurance programmes can be deficient when a claim is made, and these deficiencies can mean that a bank's protection as the loss payee under the hull coverage does not perform or the liability limits may be insufficient to reconcile the legal liability resulting from a loss incident. Contingent Hull coverage provides protection for a bank or lessor so that even if the lessee's insurance was defective the full value of the aircraft will be paid to the owner.

Contingent Liability provides additional liability protection for the owner/lessor in the event that they are joined in any lawsuit after the lessee's coverage is exhausted or fails. The policy also provides full legal defence cost coverage in favour of the lessor.

Additional protection can be provided under a contingent deductible extension which pays the repair cost of any uninsured damage discovered on the aircraft post-default, which otherwise would have been uninsured due to the application of the deductible retention within the lessee's hull insurance policy. Deducible exposure can reach $1million, and the funding of this type of loss at the time of default can challenge the resources of lessors when their equity is most exposed.

For more information please contact broker@amspitman.com or download the Proposal Form (Word .doc) or the Contingent Hull Deductible Proposal Form (Word .doc).

For general discussions and information about any of the special services provided by the financial insurance team at AMS, please contact broker@amspitman.com.