To identify the territory of regulation and tax for an aviation risk consider:
1. The nature of the cover provided;
2. The jurisdiction in which the aircraft is registered;
3. The physical location of the property or aircraft; and
4. The location of the insured’s residence(s) or business establishment(s).

Aircraft hull and aircraft liability
Aviation liability
Aviation products liability
Aviation cargo
Aircraft crew personal accident cover
Space

Aircraft hull and aircraft liability

Aircraft hull insurance covers losses arising from the physical damage to aircraft hull as a result of various perils, including war and terrorism. Aircraft liability insurance covers operators of aircraft for third party liability.

The risk location may be determined by one or more of the following factors:

• Physical location of the aircraft (place of operation)
• Jurisdiction in which the aircraft is registered
• Residence or establishment of the insured

Please see the territory specific guidance on Crystal for specific risk location rules.

It is possible for a contract to have more than one risk location, if, for example, it covers more than one aircraft and the insured aircraft are registered in more than one jurisdiction. It is also possible for the risk location rules of different territories to overlap, i.e. where one territory determines risk location by insured’s business establishment and another territory determines it by aircraft registration. Therefore a single aircraft can have multiple risk locations. 

Aviation liability

Aviation liability covers a wide range of legal liabilities associated with airport and other aviation operations, excluding aircraft operations.

The risk location is the territory in which the insured is resident or its business is established.

If more than one insured resident/business establishment is covered, then each may individually create a risk location.

Aviation products liability

Aviation products liability insurance is taken out to provide coverage for components used in aircraft or other aviation products, e.g. avionic software.

The risk location is the territory in which the insured business is established.

If more than one insured business establishment is covered, then each may individually create a risk location.

Aviation cargo

Aviation cargo insurance covers losses arising from the physical damage to cargo while it is in transit by air and for up to 60 days whilst in storage. (After 60 days it will be seen as Property - Standalone storage.)

The risk location is usually the territory in which the insured is resident or its business is established. However, in a few instances, where the goods are physically situated or being transported to or from may also create a regulatory and tax location of risk.

Please see the territory specific guidance on Crystal for specific risk location rules.

Aircraft crew personal accident cover

Aircraft crew accident insurance provides cover in the event of death or injury to a member of an aircraft’s crew. The insured is normally the aircraft owner or operator.

Where the policy is written in relation to a specified aircraft the risk location is determined in the same manner as aircraft liability (see above).

Where the aircraft is not specified or is unknown the risk location is the territory in which the insured is resident or its business is established.

Space

Risk location guidance for space risks is covered in the Space section.


Definition of 'business establishment'

European Union (EU) legislation defines the term ‘establishment’. Outside the EU the term is not so well defined, so in the absence of any contradictory guidance, it is appropriate to follow the EU approach.

Examples of business establishments:

  • subsidiary companies 
  • branches of companies 
  • representative offices 
  • offices managed by businesses’ own staff 
  • tied selling agents 
  • factories and workshops 
  • mines and quarries 
  • oil and gas wells 
  • drilling platforms fixed to sea bed

 

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Risk locator tool

Risk Locator | Establish the location of your risk

Frequently asked questions 

Introduction to Risk Location

What is risk location and why is it important ?

Introduction to risk location

Establishing the risk location

To help establish risk location please consider the questions provided via the link below

How to establish the risk location

Class of business guidance

To help you establish the risk location please consider the class of business

Class of business guidance 

Risk Location Examples

The interaction of different territorial rules can make a given scenario complex. Applying the principles set out will assist market participants in establishing the risk location.

Risk location examples

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Contacts

Lloyd's International Trading Advice
(LITA)

Lloyd's Desk,
Ground Floor,
Underwriting Room

t: +44 (0)20 7327 6677
e: LITA@lloyds.com