Regulation (EC) No 785/2004 (air carrier insurance)
The EU regulation setting the minimum liability insurance amounts that air carriers and aircraft operators flying in the Union must hold, including for war and terrorism risks.
Regulation No 785/2004 requires every air carrier and aircraft operator serving the European Union to insure its liability toward passengers, baggage, cargo and third parties on the ground. It sets minimums: 250,000 special drawing rights per passenger for passenger liability, and, for third parties, an amount per accident that rises with the aircraft's maximum takeoff mass, from 750,000 SDR for the lightest to 700 million for the heaviest. These amounts must expressly cover acts of war, terrorism, hijacking and sabotage, which makes mandatory the cover provided by the AVN 52 extension and war risk markets. The regulation was adopted after insurers abruptly withdrew that cover in the aftermath of September 11, 2001, when states had to step in temporarily for the market.
Adopted on April 21, 2004 and applicable since April 30, 2005, the regulation requires a wide-body aircraft above 500 tons at takeoff to carry third-party liability insurance of at least 700 million SDR per accident, war and terrorism included.
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