Magazine article Risk Management

Aviation Liability's Expansive Scope

Magazine article Risk Management

Aviation Liability's Expansive Scope

Article excerpt

Headlines trumpeting $50 plus million court awards stemming from aircraft accidents tell a chilling story for manufacturers in the aviation industry. Consider that today, the world aviation insurance market, in terms of total premium. is probably in the $500 million to $600 million range. "It would not take a lot of ($50 plus million) losses to eliminate that premium," Ken Mac-Clelland, senior vice president for Willis Corroon Aerospace in New York, pointed out in an aviation industry session at the 32nd Annual RIMS Conference in New Orleans.

"There hasn't been a whole lot of attention to risk management in the (non-critical) aircraft products field," Mr. MacClelland noted, adding however, that "aircraft products is an ideal situation where a risk manager can take an offensive stance and come up with a 'product integrity program." This is simply a program whereby the risk manager goes to the line and shop floor supervisors and informs them about managing the risks of the business. Specifically, the risk manager would convey the risk management department's objectives, recent developments in the insurance industry, concerns to be considered when introducing new products, designing and drafting sales contracts, business practices and the specter of litigation, and file organization. …

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