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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:
Explanation
Statement 1 is correct: Aviation Hull Insurance is a specific insurance policy designed to cover physical damage to the aircraft itself. This includes the airframe (body), engines, avionics, and other on-board equipment. It provides financial protection against risks while the aircraft is on the ground, taxiing, or in flight, which is distinct from liability insurance that covers third-party damages.
Statement 2 is correct: The Montreal Convention of 1999 (formally the Convention for the Unification of Certain Rules for International Carriage by Air) establishes a modern framework for airline liability. It introduced a two-tier liability system for passenger death or bodily injury. Under the first tier, airlines bear strict (no-fault) liability up to a specified limit (currently over 128,000 Special Drawing Rights). This means the family or nominee of a deceased passenger is entitled to compensation without needing to prove the airline's negligence or fault. India acceded to the Convention and implemented it through the Carriage by Air (Amendment) Act, 2009.
PROVENANCE & STUDY PATTERN
Guest previewThis is a classic bouncer drawn from deep current affairs and specialized legal frameworks, likely triggered by recent aviation incidents or insurance sector reforms. UPSC is testing your awareness of international conventions beyond the usual environmental ones (Montreal Protocol vs. Montreal Convention). Don't panic if you don't know the exact insurance terms; focus on the legal principle of 'strict liability' which frequently appears in news regarding disaster compensation.
This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.
- Official tender document from the Civil Aviation Department, Haryana, for aviation insurance.
- Explicitly lists the components to be insured under the policy, including the airframe, engines, and standard instruments/equipment.
- Distinguishes between the 'present value of the aircraft with standard instruments' and 'extra equipment and accessories' for insurance declaration purposes.
- Academic legal journal providing a technical definition of aviation hull insurance.
- Confirms that hull insurance specifically covers 'actual physical damage' to the aircraft itself.
- Notes that it protects against replacement costs, repairs, and accidental loss.
- Official GST Council document classifying insurance services.
- Categorizes aviation insurance under 'Marine, aviation, and other transport insurance services' (Code 997135).
- Defines the scope as underwriting risks of damage to or loss of property for aircraft.
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