Aviation insurance companies against war risks have issued notifications to cancel insurance coverage for certain airlines based in Israel and Lebanon due to the ongoing conflict in the region, with some cancellations already in effect. Reuters reported from three informed sources that aviation insurance companies in Europe, the United States, and the Lloyd's market in London can issue seven-day notifications for cancellations or other changes to terms and conditions in the event of a major conflict that they believe will significantly increase long-term insurance risks.
Insurance companies covering “El Al,” “Israir,” and “Arkia” previously indicated they might issue such notifications due to the war between Israel and the Palestinian Islamic Resistance Movement (Hamas). Two sources told Reuters that Israeli airlines have now received these notifications, without specifying which companies.
Bruce Karman, the Chief Insurance Officer at Haifa Insurance, noted that the willingness of war risk insurers to continue covering these risks without imposing additional costs varies, and some are now looking to withdraw coverage, especially in light of reports that the Israeli government has provided support for covering flights.
The Israeli parliamentary finance committee approved a plan last week to provide a government guarantee of six billion dollars to cover war risk insurance for Israeli airlines. Israeli airlines have continued their flights while most foreign airlines have canceled flights to Tel Aviv, with an increase in flights transporting passengers abroad and those called for service from reserve soldiers.
Airlines typically offer two types of insurance: an "all risks" policy covering standard damages related to the aircraft and passenger liabilities, and a "war" policy to cover losses incurred to the aircraft due to war or terrorist acts.
