• McGill and Partners has launched a specialist aviation insurance product covering aircraft spares and equipment on the ground against war perils, closing a long-standing gap in traditional hull war policies.
• Previously, war risk cover generally applied only while spares were in transit, leaving high-value assets stored in warehouses and hangars exposed; with engine values reaching around US$50m, this created a material balance sheet risk for airlines and lessors.
• The new policy extends protection to ground-based storage against a wide range of war-related events, with defined per-item limits and annual aggregates, and arrives amid heightened geopolitical tension and increased risk to aviation infrastructure in conflict regions.

McGill and Partners, the independent global specialty insurance and reinsurance broker, in partnership with certain carriers in the London market, has launched a bespoke aviation insurance solution that addresses significant, unmitigated risk within the aviation sector. Coverage is specifically designed to protect aviation spares against war perils while on the ground.

Historically, aviation hull war policies have only covered spares for war perils while they are in transit by sea or air, leaving ground-based assets exposed. With no existing protection against war perils on the ground, airlines and lessors are exposed to significant financial loss. With individual aircraft engine values approaching USD 50 million, the absence of ground-based war peril coverage creates a direct and material risk to the balance sheets of both airlines and lessors for these multi-million-dollar assets.

McGill and Partners’ new policy is designed to provide ground-based war coverage and protection for spares and equipment located on the ground and not in transit by sea or air.  It provides war perils coverage for physical loss or damage resulting from war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power. The solution will have defined limits with a sum insured per item, subject to a defined annual aggregate limit.

The announcement comes at a particularly crucial time for the market, with conflict in the Middle East, in particular seeing airports acting as key targets for those actors involved.

Jon Petursson, Partner – Aviation at McGill and Partners said: “The launch of this new policy is incredibly timely and a demonstration of how McGill and Partners’ constantly innovates to provide clients with comprehensive protection where they need it most. For years, traditional hull war policies have left airlines and lessors significantly exposed to financial loss due to insurance coverage for spare parts being restricted while they are stored.

“Multiple warehouses and hangars hold significant inventories of high value assets, including individual engines worth up to USD50 million, with no existing protection for stored spares impacted by physical loss as a result of war, and representing a significant and growing balance sheet risk. This solution can provide the assurance, protection, and financial security that operators require to safeguard essential equipment and high-value assets, regardless of their operational status.”

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