April 20, 2012

Insurance Considerations for International Travel

Aircraft are made to travel over certain distances. Most are able to travel outside of the USA, even if it requires multiple stops. Any time you travel outside of the country there are a number of factors and coverages to consider – for the aircraft, you, and your employees.

Keep the following in mind:

  • The aircraft policy territory needs to include your destination and all locales along the route.
  • War Risk, High-jacking, and Allied Perils hull and liability coverage should be purchased. These coverages will also pick up losses due to seizure of the aircraft by a foreign regime and malicious acts.
  • There are also location-specific considerations.
    • If traveling to Mexico, you will need a Mexican liability insurance certificate for the Mexican authorities. Your policy will cover you there (if it is covered in the policy territory), but this separate policy, written by a Mexican insurance company, will satisfy the requirements of the Mexican government. Some insurance carriers can provide this directly, or your agent should have access to several other options.
    • Canada has minimum requirements. More information on this can be found here.
    • The European Union also has minimum insurance coverage requirements for flying into or over one of the EU countries. The requirements vary based on the Maximum Take-off Mass (Weight) of the aircraft. You can find this information here.

There are two supplementary coverages on many aircraft policies that can provide some “coverage” for employees or surviving family that could supplement workers’ compensation.

  1. Medical Payments – Most aircraft policies include $1,000-$5,000 per person that can be applied regardless of fault or status to medical expenses, funeral costs, etc.
  2. Guest Voluntary Settlement –This coverage was originally intended to serve as a vehicle for immediate settlement in the event of a loss. This is available regardless of fault as long as the injured passenger, or their surviving beneficiary, waives their right to seek further damages. In recent years, this coverage has been used to supplement workers’ compensation coverage. This is available on some, but not all aircraft policies.

If company employees are traveling on business in the scope of their employment, they are subject to workers’ compensation laws and covered by workers’ compensation policies. Thus, they are excluded from the aircraft liability coverage of a company-owned or -operated aircraft. If they are on a company aircraft, but not in the scope of their employment, they could be considered passengers and eligible to sue under the aircraft liability coverage to the full policy limits.

There are some coverages available in workers’ compensation policies for foreign travel (Foreign Voluntary Coverage). If travel will be in destinations of unrest or concern, kidnapping and ransom coverage should be considered. There are also very affordable short-term policies for international travel available from several carriers that offer various coverages for international travel including foreign medical expenses, repatriation expenses, accidental death and dismemberment coverages, and more. One such product can be found here. Some credit card companies provide limited coverages when traveling on a ticket purchased by their card. Check with your card provider for specific information pertaining to your card.

Most life insurance policies don’t exclude travel on private aircraft, or travel abroad, but it is always a good practice to read the policy to make sure. It would also be prudent to be aware of how your health insurance coverage may or may not respond in a foreign country.

In the end, if you are taking your company aircraft out of the country, please let your agent know so that they can ensure that the necessary coverages are in place.

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