No. H026/02For release - March 15, 2002
OTTAWA — Transport Minister David Collenette today announced that the Government of Canada will renew its indemnification for third-party aviation war risk liability for essential aviation service operators in Canada.
The initial provision of an indemnity for a period of 90 days was announced September 22, 2001. It has been extended twice, and will expire March 21, 2002. The new indemnity program will extend from March 22, 2002, until May 20, 2002.
"The insurance market has not yet recovered sufficiently to re-introduce acceptable commercial coverage," said Mr. Collenette. "The Government of Canada's intervention in the insurance market is only temporary; we are actively involved in discussions with other countries and the industry to find a permanent solution."
The Government of Canada is responding, as are governments of other countries, 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, the Air Transport Security Corporation and other essential service providers at airports, such as ground handlers and re-fuellers. It applies more specifically to:
those entities that already carried such coverage at the time of cancellation; and
only to the limit of the amount covered under the insurance policy immediately before the effective cancellation time, less whatever coverage is commercially available during the period of extension.
As a general rule, coverage up to US$50 million is available from the commercial market.
"The situation in today's air industry insurance market is a worldwide concern," added Mr. Collenette. "There are several initiatives under development, including an international one, aimed at finding a longer term solution for aviation war risk liability coverage."
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Contact:
Anthony PolciDirector of CommunicationsOffice of the Minister, Ottawa(613) 991-0700
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