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:

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.