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8 Guidebook for Developing and Managing Airport Contracts
1.13 Insurance
Airport and airline insurance requirements are addressed in the following sections.
1.13.1 Airport Insurance
A recent 2007 ACI/NA Airport Operating/Use Agreement Insurance Requirements-Bench-
marking Survey (ACI Survey) revealed that only 44% of the airports that responded had airline
agreements that contained language requiring the airport to carry property insurance and only
35% required airport liability insurance. Of the airports that responded that the insurance was
required, most indicated that a limit was not specified. When a limit was indicated, it was gener-
ally replacement value.
See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts
from the MWAA Agreement for provisions regarding the authority's insurance obligations.
As demonstrated by the lack of airport insurance requirements, it appears to be generally
assumed by airlines that the airports carry appropriate insurance coverage. This may change in the
future, due to a perception of enhanced risk, with airlines insisting on documentation of the air-
port's coverage of the airlines' insurable interests in the airport.
1.13.2 Airline Insurance
Many older airline agreements contain language no longer used in the insurance industry.
Examples of this include the terms "comprehensive general liability insurance" and "broad form
property endorsement." Airports should consult with an insurance advisor when drafting a new
or amended airline agreement to make sure that both the language and coverage limits are
updated.
Few airports require no insurance coverage. Airports that require coverage have significantly
different requirements regarding types of insurance, coverage limits, and policy requirements.
Types of Insurance
Most airports require airline general liability insurance that covers all ground operations and
all airport premises and includes products/completed operations and personal injury. Some
general airline liability requirements in the agreements also include coverage for aircraft fueling
and environmental/pollution liability. Few require terrorism/war coverage. Most airline agree-
ments require auto liability for both the airfield and roadways/non-airfield.
Amounts of Coverage
The amount of coverage required varies significantly among airports, even those of similar size.
It is difficult to generalize in this area, but there appears to be a trend in larger airports in recent
agreements to increase the limits for all types of insurance. For example, both SEA and STL
require $500 million in airline liability insurance and $5 million in auto liability insurance.
Airline Liability Insurance. The coverage requirement in this area ranges from $100 million
to $500 million for major carriers and, if differentiated in the agreement, $25 million to $200 mil-
lion for regional airlines. The ACI survey showed that only 4% of airports surveyed require liabil-
ity insurance greater than $300 million. The ACI survey also noted that most major airlines carry
liability insurance in amounts equal to $1 billion or greater.
Automobile Liability Insurance. Coverage in this area is frequently differentiated between
landside and airside coverage. Most airports in the ACI survey require less than $5 million in land-
