Canadian Shipper


Government extends air insurance indemnity to new entrants

Transport Minister David Collenette says that the Government of Canada will extend its temporary aviation war risk liability insurance indemnity to new entrants on terms equivalent to those for existing essential air service operators in Canada.

“The Government of Canada is extending these terms to new entrants in order to facilitate diversification and further promote competition in the Canadian air industry. More players in the air industry means more choices for stakeholders and Canadian travellers,” said Collenette. The initial provision of an indemnity was announced September 22, 2001. The indemnity was extended, and will expire July 19, 2002.

A new entrant is an air service operator that has started since September 11, 2001, or intends to start in the near future, the operation of an airline, the operation of an airport, the supplying of goods or services to an airport operator, or the provision of goods or services to the Canadian Air Transport Security Authority or NAV CANADA.

The Government of Canada says it is responding to the decision by international insurers to withdraw previous levels of third-party aviation war risk liability coverage, which were available before September 11, 2001. This indemnity program applies to Canadian air carriers, airports, NAV CANADA, and other essential service providers, such as ground handlers and re-fuellers. As a general rule, coverage up to US$50 million is available from the commercial market.

“Our intervention in the insurance market is only temporary; we will continue to participate in discussions with other countries and the industry to help find a permanent solution,” said. Collenette.