Transcript Presented by: Gates and Partners Solicitors 20 St. Mary At

Lease Contracts – How to Negotiate
the Insurance Provisions in your
Lease
Presented by
Aoife O’Sullivan
Partner
Russian Aviation
Insurance Conference
9th December 2009
Moscow
Common Issues
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2
Contract Parties
Assignments of Insurance
Level and type of cover
Hull Releases/salvage
Contract Parties/Loss Payee
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3
AVN 67B/C - the “Contract Parties” are elevated to
the status of an Additional Insured under the policy
and therefore have an interest in the proceeds of the
insurance policy as an insured. This gives them
greater status than just being named as a “loss
payee” and, in the event of a Total Loss, the
insurance proceeds will be paid either to, or to the
order of the Contract Parties.
Difficulty with hull releases
Assignments of Insurance
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4
Single aircraft or fleet?
What is being assigned? Passenger liability
At what point in time is it assigned?
Acknowledgement by the Insurer
Level and Type of Cover
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5
Minimum levels of insurance required by aircraft
operators and air carriers in respect of third party
cover, passenger cover, baggage, cargo and cover
for risks of war and terrorism.
Dependent upon the number of passengers carried
and in relation to third party cover the MTOM
(Maximum Take Off Mass) of the aircraft concerned.
TLO/ D&O Insurance/Legal Defence
Piercing the corporate veil
Third Party Insurance - Regulation
(EC) No 785/2004
CAT
MTOM (kg)
MINIMUM INSURANCE
(MILLION SDRs)
1
2
3
4
5
6
7
8
9
10
6
Up to 499
500 - 999
1,000 - 2,699
2,700 - 5,999
6,000 - 11,999
12,000 - 24,999
25,000 - 49,999
50,000 - 199,999
200,000 - 499,999
500,000 plus
0.75
1.5
3
7
18
80
150
300
500
700
(Million Sterling * )
Approximate only
0.7
1.4
2.8
6.6
16.9
75.0
140.7
281.4
469.0
656.7
Hull Releases/Salvage
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7
Subrogated claim against third parties
responsible for the accident
Selling salvage in the aircraft wreckage – at
what price and in whose interest?
Taxation issues
Agreed Values
Practical Tips
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8
Documentation bible
Lease terms review by broker
Thank You
Gates and Partners
Aviation and Commercial
Lawyers
20 St. Mary At Hill
London EC3R 8EE
Tel: +44 (0)20 7220 5950
Fax: +44 (0)20 72205951
www.gatesandpartners.com