Newspaper article The Evening Standard (London, England)

Perils of Insurance Industry's Spreading Malaise

Newspaper article The Evening Standard (London, England)

Perils of Insurance Industry's Spreading Malaise

Article excerpt


MUCH has been made of the Government's prompt rescue of British airlines on notice that from Monday this week they would not be insured for war risks and therefore under the terms on which most of their aircraft are leased would not be able to operate. The Government has provided cover for a month to give the commercial insurance industry time to sort itself out. A similar approach was supposed to have been adopted by other European Union countries.

Though planes appear to be taking off and landing normally from British airports, the situation is a lot messier than this bailout would have us believe. For one thing it is not enough for the aircraft alone to be covered.

Equipment they use on the ground, in particular refuelling units, also needs to be insured. This point has been missed by several governments so it is possible for a plane to fly from its home base and find it is unable to get back because the local refueller is not insured.

Another thing that is not at all clear is the status of incoming aircraft.

The US government has said it will cover American planes in US airspace - but what about transatlantic flights? They are probably all right, but can the same be said for the many other aircraft still coming in from the far corners of the world - Heathrow serving more international destinations than any other airport? Do they all have cover? If so from whom? Is anybody checking?

And while we are at it, has anyone done the sums for that oil refinery in Toulouse which blew up last week and killed more than a score of people but was largely overlooked in the focus on events in Manhattan?

It may well suit everybody not to ask too many questions for a few days, but it ought not be much longer. In some respects the insurance-industry has virtually ceased to function in whole classes of business because the potential claims are so complex that many do not know if they will have the capital to continue writing business. …

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