The aviation sector

The aviation sector is a developing market for ITIC, in which we have seen more than a 25% growth during the past 12 months. This is an area which we would like to work with you to develop.

The UK and USA are regarding as having some of the world’s most successful national aviation authorities. However, the regulation and guidance of all National Aviation Authorities over their aviation sector provides ITIC with an excellent foundation on which we intend to build a solid portfolio of aviation business. 

There are a number of professions which ITIC can insure, including, but not limited to:

• Aviation charter and lease brokers
• Aircraft managers; pool managers, crew managers and insurance managers
• Aircraft technical managers, including continuing airworthiness management organisations and surveyors
• Aircraft surveyors; whether for potential lessors, lease termination inspection or lease renewal; PPI or build inspections on delivery or aircraft hull insurers
• Aviation consultants, including those providing advice on applications for AOC and operating licences, aircraft acquisitions and route planning
• Aircraft designers, whether of supplier furnished equipment (SFE), buyer furnished equipment (BFE) or modification (supplemental type certification).  Our insurance can provide cover for pure financial losses arising from negligent design which would not be covered by a standard aviation products liability policy.
• Air freight brokers
• Aviation loss adjusters
• Other aviation professionals

We work closely to ensure that ITIC’s terms take into account the thorough system of approvals administered by your National Aviation Authority. For further information, please contact Melanie Thomas, the Account Executive responsible for aviation business.

Manufacturing problems always end up on the designer’s desk

A designer of light aircraft was asked by an aircraft builder to design a single turbo prop aircraft, which was to be used for an air ambulance service between small islands off a coastal area. The aircraft was designed and then built by aircraft manufacturers.

Following delivery, the end user discovered small cracks in the hull of the aircraft. The aircraft was repeatedly returned to the builder for repairs, but the cracks continued to reappear on the hull. Eventually, the end user decided to claim against the manufacturer for supplying a defective product.

In turn, the manufacturer claimed that there was nothing wrong with the build quality of the aircraft, but rather that it had been designed badly. The designer was therefore brought into the proceedings as a third party defendant (along with various other parties including the propeller manufacturers and the hull manufacturers). Upon investigation, it became apparent that the cracks were caused by excessive vibrations in the hull.

Various theories for the vibrations were considered, but the most likely explanation was that the propeller was at fault due to unforeseen frequency resonations. This was something that the designers had considered and tested for, and they provided their calculations. However, as the hull was a completely new design, it did not resonate as had been predicted. Therefore, it was clear that the designer had not been negligent in the provision of his service to the manufacturer. Furthermore, there were certain reservations concerning both the weld quality of the hull by the manufacturer and the actual build quality of the hull material itself.

ITIC defended the designer successfully.

If a minor detail is missed, major problems follow

Underwriters instructed an aviation loss adjuster to investigate and handle a claim arising from the loss to an aircraft. After investigations, the loss adjuster concluded that the loss had  been caused by mechanical engine failure.

The underwriters then commenced litigation against the engine  manufacturers, on the basis of the loss adjuster’s findings. In their defence the manufacturers instructed an expert witness who countered the loss adjuster’s allegations of mechanical failure. Nonetheless, the loss adjuster believed his investigation to have been without fault. The underwriters therefore continued with the litigation.

When the litigation was fairly advanced, evidence from the engine manufacturer’s expert witness was disclosed, showing that the loss adjuster’s theory on the engine malfunction was incorrect. Furthermore, this evidence had been available to the loss adjuster  throughout the proceedings, but he had simply missed it.

The underwriters had no choice but to settle the claim on the  best terms available. However, they had incurred substantial litigation costs, which they then sought to recover from the loss adjuster. Their claim alleged negligence on loss adjuster’s behalf in either failing to see the evidence at the beginning, or failing to acknowledge incorrect findings once the defendant’s expert report became known.

ITIC sought legal advice on behalf of the loss adjuster, and it became apparent that the loss adjuster was negligent in handling the investigation and claim. On this basis, ITIC settled the underwriters’ claim.