The Value of Aviation Insurance

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Air travel has become a necessity or a way of life if you may, for all of us in the society we live in today. It has come to be a commonplace and a convenient means of transportation. When booking a flight though, most of us tend to take for granted that the plane will take off and land at our destination intact. We tend to focus more on the airlines service and comforts offered on board that the great amount of risks involved in each journey. The average passenger on board an aircraft does not understand that airline operators and airports across the world are faced with diverse and challenging risks that can affect the operation of their business. We are mainly concerned as to whether or not our luggage will be waiting for us at arrivals. To name a few of the many factors that can affect an airlines performance there’s aircraft structure, air traffic control, pilot experience, fuel availability, ground crew competence, weather conditions and many more. The most important factor which, under law, must be met before any aircraft can fly is insurance. Insurance is among the most vital and valuable assets enabling an aircraft to fly. Of course all airlines require financial means, aircraft, experienced staff and fuel, but without insurance no aircraft will ever take off. Aviation Insurance has been around since the early part of the 20th century, with the first aviation insurance policy being underwritten by Lloyds of London in 1911. However the company pulled out of the sector a year later after bad weather and crashes caused severe losses. By 1933 the airline industry was well-established, and it was realized that there needed to be specialized insurance for it. The International Union of Marine Insurance set up an aviation committee and by 1934 eight European insurance companies were finally established, and the International Union of Aviation Insurers was set up (Kranse, 2011). Insurance guarantees a monetary compensation for losses which the insured may...
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