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.
Select the answer using the code given below:
Answer & explanation
Answer: (c) Both 1 and 2
Both statements are correct. Aviation hull insurance is the cover for physical loss or damage to the aircraft itself, and under Article 21 of the Montreal Convention an airline cannot escape liability for a passenger's death up to a fixed limit, whether or not it was at fault.
- ✓ 1. Hull (all-risk) insurance pays for physical loss or damage to the insured aircraft, including total loss. It is separate from liability cover, which pays claims made by passengers or third parties.
- ✓ 2. The 1999 Montreal Convention makes the carrier liable for a passenger's death on board or while embarking or disembarking. Up to 100,000 SDRs (raised to 151,880 SDRs in December 2024) the carrier cannot exclude or limit that liability, so the family need not prove fault. Above that, the airline can defend itself by proving it was not negligent. India became a party in 2009.
Remember · Hull cover insures the aircraft; the Montreal Convention gives strict (no-fault) liability for passenger death up to the first-tier limit, now 151,880 SDRs.
Sources
- Aviation insurance: Hull All Risk Insurance Policy, The New India Assurance Co. Ltd. (public-sector insurer) ↗ · reference work “The policy scope includes all physical loss or damage sustained by the insured aircraft including total loss, disappearance.”
- Montreal Convention 1999, Article 21 (treaty text, U.S. Department of State archive copy, Internet Archive) ↗ “For damages arising under paragraph 1 of Article 17 not exceeding 100 000 Special Drawing Rights for each passenger, the carrier shall not be able to exclude or limit its liability.”
- Montreal Convention 1999, status of parties, ICAO (Internet Archive copy) ↗ “CONVENTION FOR THE UNIFICATION OF CERTAIN RULES FOR INTERNATIONAL CARRIAGE BY AIR DONE AT MONTREAL ON 28 MAY 1999 Entry into force: The Convention entered into force on 4 November 2003*. Status: 141 parties.”
Question and answer: UPSC's provisional GS Paper I (2026, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·