Which of the following statements about insurance in aviation sector is/are correct? 1. 'Aviation Hull Insurance' covers the phys…

Question

Which of the following statements about insurance in aviation sector is/are correct?

1. 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment.

2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.

1. A. 1 only
2. B. 2 only
3. C. Both 1 and 2 (Correct answer)
4. D. Neither 1 nor 2

Correct Answer

Option C — C

Detailed Solution & Explanation

The correct answer is Option C.

Key Points

• both statements 1 and 2 are correct.
• Statement 1 is correct: Aviation Hull Insurance covers physical loss of or damage to the aircraft itself — the airframe (body), engines and on-board equipment. It is the aviation equivalent of a motor 'own-damage' cover.
• Statement 2 is correct: under the Montreal Convention, 1999 (in force from 2003; India is a party), airlines are held to strict liability for passenger death or injury up to a defined limit — the family/nominee does not have to prove the airline's fault to claim compensation up to that threshold. Beyond it, the airline can avoid liability only by proving it was not negligent.
• the Montreal Convention unified and modernised the older Warsaw Convention (1929) rules on international carriage by air, standardising passenger compensation and baggage/cargo liability.

Exam Tip

• 'strict liability without proving fault' up to a set limit is the defining feature of the Montreal Convention that examiners test.