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Glossary of Terms

Our policies are very easy to understand, however some Aircraft Insurance terms and phrases still need explaining. Please have a look at our Glossary of Terms below to help you understand your Aircraft Insurance Policy.



Additional Insured

A persons or person other than the original named insured, who are protected under the terms of a policy.

Aggregate Policy Limit The maximum amount an insurance company will pay under the terms of a policy during the term covered by that policy.
Aircraft Liability Insurance 

This form of coverage protects the insured from claims for bodily injury or death by members of the public and passengers if included under the terms of the insurance. This kind of insurance is normally written with a combined single limit, or total aggregate amount with no limit per person, or for each passenger. Protection against loss from claims filed by any third party for damage to property, including the use of that property, is a part of this coverage

Other policies may be issued with a limit per injured passenger, and another limit per occurrence.

Protection against loss from claims filed by any third party for damage to property, including the use of that property, is a part of this coverage.

Aircraft Non-Ownership Liability   Coverage that protects the named insured from liability arising out of the use of aircraft not owned by or regularly provided to the named insured.
Airport Premises Liability Designed to protect the owner or operator of an airport against losses arising out of use of the airport.
Air Taxi Operators   Non-scheduled air carriers operating on-demand commercial service for passengers and cargo shippers.
Blanket Insurance One amount of insurance covers all property located at multiple locations.
Bodily Injury   Injury to the body of a person including sickness, disease or death.
Breach of Warranty

Provides physical damage (hull) coverage by endorsement for a lender in the event that the insured invalidates or breaches the contract and the company would otherwise not be obligated to pay.

Business and Pleasure  

Any personal, pleasure, family or business use of an aircraft excluding any operation for which a charge is made.

Cancellation, Pro Rata

The cancellation of an insurance contract, usually at the request of the insurer, prior to its expiration. The insured normally receives a refund of that portion of the premium coinciding with the percentage of the unexpired term of the policy.

Cancellation, Short Rate

At the request of the insured, cancellation of a policy prior to its expiration will involve a return to the insured, of less than the proportion of the premium that would have been refunded under the pro rate procedure.


Commercial use of an aircraft for which a charge is made or compensation (consideration) in some form is received by the insured, while either carrying passengers and/or cargo, or performing some other service under a written or oral agreement (contract).

Chemical Liability

Liability incurred by aerial applicators as a result of chemical discharges from the aircraft for pest control or fertilisation.

Clause A provision that requires an insured to maintain insurance equal to some selected percentage of value, normally 80 or 90 percent of actual cash value or replacement value of the property. Frequently misquoted as co-broker aircraft insurance or co broker aircraft insurance.

Commercial Use Use of an aircraft for which a charge is made while providing instruction, rental, charter or other services.
Completed Operations  used to describe aircraft repairs and servicing, including installation of parts and accessories.
Consequential Loss

A loss caused only indirectly by a risk against which insurance is in force, for example losses to power company customers as a result of downed lines.

Contractual Liability

A contractual obligation to pay damages for which another is legally liable.

Conventional Landing Gear

The two main wheels are mounted forward of the centre of gravity with the balancing wheel in the rear. The aircraft sits with a nose high attitude while on the ground.

Declarations Page Statements that present information about the risk to be insured, including items such as policy period, amounts and types of coverage and a description of the insured property.

Amount of expense to be paid by the insured after a loss, and prior to or in conjunction with payment of any policy benefits.

Degree of Risk The likelihood of an occurrence; the accuracy with which losses can be predicted.
Earned Premium

That portion of a premium for which the policy protection has already been given during the now-expired portion of the policy term.

General Damages

Includes many tangible losses in addition to the loss of financial support such as loss of society, companionship, consortium, love, care and protection.

Hangarkeepers In-flight

Protects the insured hangarkeepers for the loss or damage to non-owned aircraft while in-flight and in the hangarkeeper’s care, custody or control.

Hangarkeepers Liability

A form of  insurance that covers the insured hangarkeepers liability for loss or damage to aircraft which are the property of others and in the insured’s custody for storage, repair or safekeeping.


A condition, operation or activity that has the net effect of increasing the possibility of incurring a loss.

Hold-harmless Agreement

An agreement under which the legal liability of one party for damages or injury is assumed by the other party to the agreement. Such hold-harmless agreements between pilots and passengers virtually never stand up in court.

Hull insurance

Insurance covering the aircraft, including the engine, propeller and all other systems and equipment permanently attached to the aircraft (though it may be removable for maintenance), including avionics. Hull insurance is usually issued with a deductible clause. Hull insurance may be written for aircraft on the ground, not in motion; for aircraft on the ground and in motion (meaning under its own power), or for aircraft in flight. When specified as all-risk coverage it covers the aircraft under all circumstances, regardless of the reason for damage or loss.


To protect and secure against damage or loss; to make good; to compensate for loss.

In Flight The time commencing with the actual takeoff run of the aircraft and continuing thereafter until it has completed its landing roll.
Ingestion Deductible A deductible for jet aircraft which applies to damage done to a turbine engine due to the engine sucking up foreign objects.
In Motion While the aircraft is moving under its own power or the momentum generated there from or while it is in flight and, if the aircraft is a rotorcraft, any time that the rotors are rotating.
Insurable Interest In property insurance an insurable interest is any financial interest based on some legal right in the preservation of the property. An exposure to a financial loss must exist for there to be an insurable interest in the occurrence of some event. In life insurance, it is usually because the insured or a beneficiary has a financial interest in the continued existence of the insured life or the expectancy of loss in the ending of the insured life. It must be present in life insurance before the contract goes into effect.
Key-person Insurance Insurance that provides adequate compensation for the loss of services by disability or death of a vital employee, and resources with which to secure in a competitive market the services of a successor. Such insurance may be written to pay the employee if disabled, his heirs in the event of death, or his employer.
Liability Insurance (bodily) Insurance to cover the cost stemming from bodily injury or death to persons other than the insured
Liability Insurance (property)

Insurance against loss due to claims for damage to another’s property.

Limit of Liability The maximum limit of liability (damages) that an insurance company assumes or is obligated to pay under the terms of any individual insurance contract.
Lloyds of London

A corporation that neither underwrites (subscribes) policies of insurance nor directly issues them itself. Insurance is written by individual “underwriting members” who must be elected to membership within the Lloyd’s Association. The actual insurer then is not Lloyd’s but instead the various underwriters at Lloyd’s. The exchange (Lloyd’s) provides underwriting quarters for its members and a place for transaction of insurance business by member underwriters, as well as risk management support services.

Loss of Use Compensation made to an insured against loss resulting from the inability to use property, such as aircraft in furtherance of his business.
Loss Payable

Provision A clause sometimes contained within a policy that provides payment of a loss for which the insurer is liable to the insured, to someone other than the insured; a third party who has an insurable interest in the property covered under the terms of an insurance contract.

Loss Ratio The ratio of incurred losses and loss adjustment expenses to net premiums earned, expressed as a percent. This ratio measurers the company’s underlying profitability, or loss experience, on its total book of business.
Named Insured The actual policyholder who is specifically named in the policy.
Negligence Failure to do what a reasonable, careful, conscientious person is expected to do; doing something that a reasonable careful, conscientious person would not do.
Occurrence An accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.
Peril The actual cause of a loss such as a fire, windstorm, theft, collision, negligence, crime, premature death and so on.
Physical Damage Direct and accidental physical loss of, or damage to property (an aircraft). The term does not infer loss of use or any residual depreciation in value, if any, after repairs have been made.
Premium, Earned

A portion or ratio of premium that has been paid to an insurance company that covered the expired segment of the policy period.

Premium, Return

A refund of paid-up premium to a policyholder. It is computed either on a short-rate basis if the insured request cancellation, or pro rata if the company terminates coverage.

Proof of Loss A statement that provides insurers with the facts necessary to determine the existence and extent of their liability.
Risk Management

The systematic identification of a company’s exposures to the risk of loss, and with decisions on the best methods for handling these exposures in relation to corporate profitability.

Risk Transfer The decision by a risk manager to transfer the burden of a loss to an insurance company by purchasing insurance or to some other person or group of persons.
Single Limit Legal Liability Liability coverage that provides one limit for bodily injury and property damage (including or excluding passengers) which represents the insurer’s maximum liability for one claim or for any combination of claims which might arise from one occurrence.
Subrogation The doctrine of subrogation gives the insurer whatever rights the insured possessed against third parties who are responsible for a loss. The right of subrogation by the insurer is limited in amount to the loss payment which has been made to the named insured. In order to actually recoup its loss payment, the insurer must prove the liability of the wrongdoer, and that the negligent party has the financial ability to pay for the loss he caused.
Supplementary Payments A policy provision whereby the insuring company agrees to pay any and all costs levied against an insured in preparation of a legal defence should a loss occur.
Territorial Limits

Stipulations in an aviation insurance policy that define the geographical boundaries in which coverage is provided to an insured.

Third Party Someone who is not directly connected with a contract, a deal, a lawsuit, an occurrence, etc., but who may be affected by its outcome OR persons other than the plaintiff or defendant who are brought into a case.
Transportation Costs A provision in the hull and liability policy indicating that, in the event of a partial loss, the aircraft must be transported by the least expensive method to a repair station. Some policies stipulate a percentage of the insured value as a limitation.
Tricycle Landing Gear The two main wheels are at the rear of the centre of gravity and a third wheel is under the nose.
Underwriting The selection and rating of risks which are offered to an insurer. The entire process is based upon the property selection and rating of risks that the insurer feels will have the greatest likelihood of being profitable for the firm.
Vicarious Liability The responsibility of one person for the acts of another.
Waiver The voluntary giving up or renouncing of a right, benefit or privilege.

A statement that certain facts are true, made by one party to a contract, and accepted by the other party as true OR an agreement to make up for any damages that result from a false representation of facts.

Why choose Alan & Thomas?
  • Free no obligation review and quotation
  • Knowledgeable aircraft insurance experts
  • Competitive premiums from leading UK aviation insurance providers
  • Insurance cover tailored to your specific requirements
  • Selection of payment options including monthly instalment option available on request
  • In-house Claims Team to manage any claim for you
  • Top 100 UK independent broker* with Chartered Insurance Broker status

* Top 100 Independent Brokers 2014 published by Insurance Age in association with Cornell Consulting

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