Insurance risk in the aviation sector

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Transporting passengers or goods by air in South Africa is subject to myriad local and international laws which, depending on circumstances, can lead to costly transnational insurance claims payable in dollars, pounds or euros. Inadequate insurance to cover international liability is one of the biggest risks faced by charter companies and small aviation operators.

While passengers being carried on commercial airlines are adequately covered, those flying on charter-type flights are typically only insured for the minimum legal requirement of R1-million per person and R2.5-million third party. But James Godden, head of Santam Aviation, advises that air carriers should rather take as much insurance cover as they can afford.

“Liability insurance is one of those things where you never know how much you need until you need it,” he says. “It’s important for operators to be aware that liability insurance is relatively inexpensive. You can get up to R5-million cover for only R3 500-R4 000 a year, and you can increase that cover for a relatively small premium increment. Even if you’re only transporting South Africans within SA, be aware that we’re becoming more litigious as a nation and R1-million may not be adequate if a local passenger sues you for a life-changing injury.”    

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