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The recent surge in bomb threats targeting Indian airlines has prompted a critical reassessment of insurance policies in the aviation industry. While standard airline insurance policies cover loss and damage due to accidents, wars, or natural disasters, they traditionally haven't included coverage for disruptions caused by bomb hoaxes. This oversight has become a pressing concern following a string of incidents over the past week, where nearly 100 flights operated by Indian carriers received bomb threats, leading to diversions and heightened security measures. The financial burden associated with these diversions, estimated to be around ₹3 crore per incident, has ignited discussions between airline executives and insurers about the need for expanded coverage.
The absence of bomb hoax coverage in existing policies has emerged as a crucial gap, prompting insurers to reevaluate their risk assessments. TATA AIG, a leading insurance provider, has acknowledged this evolving situation and indicated that insurers and reinsurers are closely monitoring the frequency and impact of these incidents. Aviation insurance consultants emphasize the need for a shift in perspective, highlighting the potential for bomb hoaxes to become a more frequent occurrence, warranting the inclusion of such diversions in future insurance policies. While some airlines, like Akasa Air, declined to comment on the situation, others, including Air India and IndiGo, have yet to respond to inquiries regarding their insurance policies.
The current landscape reveals a lack of comprehensive coverage for business disruptions caused by non-accident-related events. While airlines can seek compensation for diversions related to medical emergencies, their existing policies do not extend to disruptions stemming from bomb threats or other similar incidents. Existing policies typically cover hull damage and related emergency expenses but may not encompass threats that do not result in physical damage. This situation underscores the need for insurers to adapt to the changing dynamics of aviation risks and provide airlines with comprehensive coverage that effectively mitigates potential financial losses. As the situation evolves, it is crucial for airlines and insurers to collaborate closely to develop tailored solutions that address the growing threat posed by bomb hoaxes and ensure the safety and financial security of the aviation industry.
Source: Airlines, insurance companies may relook at disruption cover