Withdrawal of third-party war liability cover (September 2001)

Third-party war liability withdrawal is the cancellation, by all aviation insurers at once, of airlines' war and terrorism liability cover, reinstated straight away under a cap. On September 17, 2001, six days after the attacks, aviation insurers sent every airline in the world the cancellation notice provided in their war covers. That seven-day notice took effect on September 24. It had never before been used worldwide. Hull, passengers and non-war liability cover were untouched; what fell was war and terrorism liability, the cover bought through the AVN 52 (Aviation, London market clauses) endorsement. Reinsurers were pressing, and insurers with depleted reserves wanted to stay solvent. Cover came back at once under a new endorsement dated September 20, 2001, AVN 52E, but on other terms. Passengers kept full policy limits. For third parties on the ground, a $50 million cap applied to all bodily injury and property damage over a twelve-month period. An airline that cannot show more does not fly: lessors, airports and authorities demand far higher limits. So governments took the excess. In the United States, the law of September 22, 2001 (Public Law 107-42) let the FAA (Federal Aviation Administration) insure carriers directly. The premium program expired on December 11, 2014; the non-premium program for defense-related flights runs to September 30, 2028. In Europe, the Commission first allowed state guarantees for one month, then until June 30, 2002. Nine member states extended them to October 31, 2002, after which the blanket approval ended. The private market has since taken back the excess, but the structure of the time still holds: AVN 52 remains cancellable on seven days and terminates automatically on war between the five powers.