Liability insurance of air carriers

SUMMARY OF:

Regulation (EC) No 785/2004 on insurance requirements for air carriers and aircraft operators

WHAT IS THE AIM OF THE REGULATION?

It establishes minimum insurance requirements for air carriers and aircraft operators in respect of passengers, baggage, cargo and third parties.

KEY POINTS

Scope

This regulation applies to all air carriers and to all aircraft operators flying within, into, out of or over the territory of an EU country. Air carriers and aircraft operators must be insured, in particular in respect of:

passengers,
baggage,
cargo and third parties,
risks associated with aviation-specific liability (including acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion).

It does not apply to:

state aircraft (military, customs or police aircraft);
model aircraft with a maximum take-off mass (MTOM)* of less than 20 kg;
foot-launched flying machines (including powered paragliders and hang gliders);
captive balloons;
kites;
parachutes (including parascending parachutes);
aircraft, including gliders, with an MTOM of less than 500 kg, and microlights, which are used for non-commercial purposes, or for local flight instruction that does not entail the crossing of international borders (in so far as the insurance obligations under this regulation relating to the risks of war and terrorism are concerned).

Compliance

Air carriers and, when so required, aircraft operators, must show that they comply with the regulation by providing the competent authorities of the EU country concerned* with an insurance certificate or other evidence of valid insurance.

Insurance in respect of liability for passengers, baggage and cargo

For liability in respect of passengers, the minimum insurance cover is 250,000 SDRs* per passenger. However, in respect of non-commercial operations by aircraft with a MTOM of 2,700 kg or less, EU countries may set a lower level of minimum insurance cover, but not below 100,000 SDRs per passenger.

For liability in respect of baggage, the minimum insurance cover must be 1,288 SDRs per passenger in commercial operations (Delegated Regulation (EU) 2020/1118).

For liability in respect of cargo, the minimum insurance cover must be 22 SDRs per kilogram in commercial operations (Delegated Regulation (EU) 2020/1118).

Insurance in respect of liability for third parties

The minimum insurance cover per accident and per aircraft depends on the MTOM of the aircraft.

Enforcement and sanctions

EU countries must ensure that air carriers and aircraft operators comply with the regulation. Any sanctions for infringements must be effective, proportional and dissuasive.
For EU air carriers, sanctions may include the withdrawal of the operating licence.
With regard to non-EU air carriers and to aircraft operators using aircraft registered outside the EU, the sanctions may include refusal of the right to land on the territory of an EU country.
If an EU country is not satisfied that the conditions are met, it must prohibit an aircraft from taking off until the air carrier or aircraft operator concerned has produced evidence of adequate insurance cover.

To take inflation into account, Regulation (EU) No 285/2010 revised the compensation limits in Regulation (EC) No 785/2004.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 30 April 2005.

BACKGROUND

For more information, see:

Air — insurance (European Commission).

KEY TERMS

Maximum take-off mass: this corresponds to a certified amount specific to all aircraft types as stated in the certificate of airworthiness of the aircraft.

EU country concerned: the EU country which has granted the operating licence to the EU air carrier or where the aircraft of the aircraft operator is registered. For non-EU air carriers and aircraft operators using aircraft registered outside the EU, this refers to the EU country that the flights are operated to or from.

SDR: special drawing right or a potential claim on the freely usable currencies of International Monetary Fund members (SDR as defined by the International Monetary Fund).

MAIN DOCUMENT

Regulation (EC) No 785/2004 of the European Parliament and of the Council of 21 April 2004 on insurance requirements for air carriers and aircraft operators (OJ L 138, 30.4.2004, pp. 1-6)

Successive amendments and corrections to Regulation (EC) No 785/2004 have been incorporated into the basic text. This consolidated version is of documentary value only.