Aviation Insurance Clauses Group (AICG) 

The Aviation Insurance Clauses Group (AICG) was established in June 2005 by the Lloyd's Market Association and the International Underwriting Association of London. The AICG establishes non-binding standard wordings, clauses and variants for use in aviation insurance policies. Users are consulted on proposed clauses and can propose variant clauses themselves. This process has significantly increased transparency for air carriers.
Further details of the AICG, including minutes of the AICG meetings and sets of draft wordings and clauses issued by the Group since its inception, are available from the AICG website.

Wordings and Consultation Drafts

In February 2017 the IUAI reached agreement that the consultation drafts, and wordings circulated by the AICG, can be made available via the Union website.
IUAI Members will be notified when consultation drafts are circulated and when new wordings are released.

Updated Terms of Reference for Aviation Insurance Clauses Group (AICG)

The Union has been advised by the AICG Secretariat that the International Underwriting Association (IUA) and Lloyd’s Market Association (LMA) have recently taken the opportunity to review the Terms of Reference (ToR) for the Group. The ToR have not been looked at formally since the creation of the Group in 2005 and it is evident that some elements are now obsolete or incorrect. A partial reason for the review has also been the end of the Brexit transitional period and the impact this has on the membership criteria in the existing Terms of Reference.

A copy of the updated ToR is available below, reflecting the following key amendments:

• Amending the membership criteria to ensure that London market entities can continue to be represented on the AICG.
• Removing several external associations that no longer exist and amending the reference to the broker association.
• Slightly extending the remit of the AICG to also consider AVS clauses, in addition to AVNs. To clarify, AVS clauses are clauses that are included in the policy but manage the administrative and technical operation of the policy rather than address policy coverage (as the AVN clauses do). As AICG only strictly considers AVN clauses, it has not drafted these AVS ‘slip clauses’ (which are currently drafted and published jointly by IUA, LMA and LIIBA). These are not drafted very often but it is thought preferable to use the drafting expertise on the AICG to facilitate these where necessary.
• Tidying up some of the language from an administrative and clerical perspective.

The AICG Secretariat has confirmed that they regard these amendments as straightforward and, in one case, necessary to facilitate the continuing operation of the Group. It is not thought that any of the changes fundamentally amend the operation, membership or core objectives of the AICG agreed with the European Commission. The European Commission have received and noted these updated Terms of Reference.

AICG Updated Terms of Reference 2021

AICG CONSULTATION DRAFT 66 (‘CD66’) REINSURANCE UNDERWRITING AND CLAIMS CONTROL

The Union has received a Consultation Draft, CD66 - Reinsurance Underwriting & Claims Control Clause, the consultation Draft, along with the accompanying AICG letter, can be accessed below. Please send any comments to the AICG Secretary. The consultation closes at end of Business (UK) on Wednesday 21 June 2023

Consultation Draft CD66 - Claims Control & Reinsurance Clause

Consultation Draft CD 65 General Aviation Wording

The Union has received a covering letter and Consultation Draft (CD 65) relating to a proposed General Aviation Wording.

The Consultation Draft has been circulated for review and input. If you have any comments please refer these to the AICG Secretary by close of business on 17 January 2023.

A copy of the Covering Letter and Draft can be accessed below.

AICG Covering Letter and Consultation Draft General Aviation Wording (CD 65)

AVN108A – Corporate Defence Costs Extension – Drafting Amendments.

The Union has been notified of some administrative drafting amendments considered by the AICG in relation to AVN108A – Corporate Defence Costs Extension.

The first amendment reflects the fact that the term “Queen’s Counsel” is no longer correct (replaced by “King’s Counsel”), the second is an amendment to rectify a typographical error.

On the basis that these changes are regarded by the AICG as being non-material, and do not impact on the meaning or application of the clause, the Committee has decided to publish the updated clause without undertaking Market consultation.

A copy of the AICG letter, and the updated clause, can be accessed from the link below.

AICG Letter and Published Clause: AVN108A Corporate Defence Costs Extension - Drafting Amendments

AICG Consultation Draft 64 (‘CD64’) AVS104 – General Policy Exclusions

The Union has been informed that earlier this year, AICG received a request from a market participant to consider drafting a model clause to essentially update AVS104B. The rationale behind the request was to update the existing clause to better reflect current market usage of the provision, where we understand the existing clause is almost always amended on a per risk basis, and often in similar ways.

An AICG Working Group was convened to consider the request further and agreed that a new clause would be beneficial. The Working Group drafted a clause and presented this to the full AICG membership for review. A further analysis was undertaken and the AICG Chair has now agreed that it proceed to market consultation.

A copy of the Consultation Letter, along with the draft clause, can be found below.

The AICG would welcome comments on the proposed clause. These should be sent to the AICG Secretary by close of Business on Monday 20 June 2022.

AICG Consultation Draft 64 (CD 64) AVS104 General Policy Conditions

Aviation Insurance Clauses Group (AICG) AVN144 Diversion Costs, Charges and Expenses Extension.

Following the circulation of AICG Consultation Draft 62 (CD 62), (see below) the Group has now published a  Diversion Costs, Charges and Expenses Extension (AVN144).

A copy of the AICG Publication Letter, along with the AVN144 clause itself, can be accessed from the link below:

AVN144 Diversion Costs, Charges and Expenses Extension

AVN57B (Australia) Civil Aviation (Carriers' Liability) Act 1959 Australia Aviation Legislation Amendment (Liability & Insurance) Act 2020

Following the circulation of Consultation Draft (CD63) in December 2021 (see below) the AICG has now published AVN57B (Australia). A copy of the AICG Publication Letter, along with the AVN Clause itself, can be accessed from the link below:

AICG Letter and Published Clause AVN57B (Australia)

AICG Consultation Draft 62 (‘CD62’) Diversion Costs and Expenses Endorsement

In September 2021, AICG received a request from a market participant to consider drafting a model AVN endorsement to address aircraft diversion. It was acknowledged that there were a broad range of clauses in use in the market in respect of aircraft diversion and suggested that there would be benefit in the publication of a specific AVN clause.
An AICG Working Group was convened to consider the request further and agreed that the proposed clause would be beneficial. The Working Group analysed a broad range of example clauses and utilised elements of those clauses in developing the proposed Diversion Costs and Expenses Extension. The clause outlines four specific types of costs, charges and expenses that could arise from an ‘In-Flight Incident’, which is defined within the clause. The clause includes the possibility for market participants to state a specific Maximum Sum Insured and Deductible in respect of aircraft diversion.

AICG Consultation Draft 63 (‘CD63’) Civil Aviation (Carriers’ Liability) Act 1959 – Australia

In Q3 2021, AICG received a request from a market participant to consider the legislative references found within AVN57A (Australia). Specifically, it was suggested that the reference to ‘Civil Aviation (Carriers’ Liability) Act 1959’ be considered in light of the Aviation Legislation Amendment (Liability and Insurance) Act 2020, which came into effect on Thursday 17th June 2020.
The AICG considered the request further and agreed that this administrative update to the clause to account for the 2020 Act would be necessary. It sought expert advice and concluded that it would be appropriate to refer to both the Civil Aviation (Carriers’ Liability) Act 1959 and the Aviation Legislation Amendment (Liability and Insurance) Act 2020, jointly termed within the clause as ‘The Acts’.

Review and Consultation

The AICG would welcome comments focused on the drafting utilised within the clauses, and their effect.

AICG consultation drafts are normally subject to 30-day consultations, but owing to the busy period for Markets over December, this has been extended to 45 days. Therefore, please could you provide any comments on the clauses to the AICG Secretariat by close of business on Friday 14 January 2022.

AICG Consultation Draft 62 (‘CD62’) Diversion Costs and Expenses Endorsement

AICG Consultation Draft 63 (‘CD63’) Civil Aviation (Carriers’ Liability) Act 1959 – Australia

Republication of Aviation Premises, Hangarkeepers and Products Liability Insurance Policy (AVN126)

The AICG has recognised the need to republish AVN126 in order to make two minor amendments, as
follows:

Page 4, Heading: Amend ‘Exclusions aplicable’ to ‘Exclusions applicable’
Page 10, Paragraph 3, Line 5: Amend ‘days notice’ to ‘days’ notice’

A copy of the letter of notification, along with the updated AVN126, dated 21 September 2021, can be accessed through the following link:

AICG Letter and Updated AVN126

AICG CONSULTATION DRAFT 61 (‘CD61’) Fuelling Grounding Liability Extension

In late 2020, AICG published a suite of updated grounding clauses, as shown below:  

AVN128     Grounding Liability Clause                                                             16/10/2020

AVN129     Partial Grounding Liability Endorsement                                     16/10/2020

AVN130       Non-Occurrence Grounding Liability Endorsement                  16/10/2020

AVN131       Grounding Liability Clause (for attachment with AVN98)       16/10/2020   

AVN132       Grounding Liability Clause (for attachment with AVN98A)    16/10/2020   

In early 2021 the AICG was contacted by a market participant who requested AICG to consider whether an update to the AVN106 (Fuelling Grounding Liability Extension) was also required to reflect the revised grounding terminology and approach. This was agreed by the AICG and a new clause drafted which was circulated for consultation in early June 2021 (CD 61).

AICG Covering Letter and Draft Clause CD 61

Following circulation of this Consultation Draft, the AICG published the Fuelling Grounding Liability Extension (AVN 106A) on 3 August 2021 (see below).

AVN106A Fuelling Grounding Liability Extension Publication

Following the circulation of Consultation Draft 61 (CD61), the AICG has now confirmed publication of a new Fuelling Grounding liability Extension  Clause (AVN106A).

The Publication Letter, incorporating the new clause, can be accessed below.

AVN106A Fuelling Grounding Liability Extension Publication

AICG CONSULTATION DRAFT 60 (‘CD60’)Air Traffic Control Liability Endorsements

In May 2021, AICG received a request from a market participant to consider drafting AVN endorsements to attach to aviation policy forms to cater for Air Traffic Control risks and ensure that the relevant wordings were updated in a uniform and correct way – currently this appears to be done on an ad-hoc, bespoke and sometimes inconsistent basis.

An AICG Working Group was convened to consider the request further and agreed that the proposed clauses would be beneficial. Two endorsements were consequently drafted, to attach to AVN104 (Airport Liability Insurance) and AVN126 (Aviation Premises, Hangarkeepers and Products Liability Insurance Policy). These have been considered by the full AICG membership and a Consultation Draft (CD 60) was circulated in early June 2021.

AICG Consultation Draft 60 (CD 60) Covering Letter and Draft Clause

Following the consultation period, the AICG published two Air Traffic Control Liability Endorsements (AVN142 and AVN143) on 3 August 2021 (see below).

AVN142 and AVN143 Air Traffic Control Liability Endorsements

Following the circulation of Consultation Draft 60 (CD60), the AICG has now confirmed publication of two new  Air Traffic Control Liability Endorsements (AVN142 and AVN143).

The Publication Letter, incorporating these new clauses, can be accessed below.

AVN142 and AVN143 Air Traffic Control Liability Endorsements Publication

AICG CONSULTATION DRAFT 59 (‘CD59’) - Business Continuity Event Insurance Period Extension Clause

In late January 2021, AICG received a request from a market participant to consider publishing a model AVN provision to allow for an automatic extension of coverage where a business continuity event leads to the inability to renew an insurance policy. It was acknowledged that there were several clauses in operation in the market with a similar effect and, as such, it was agreed by AICG that the development of a model AVN clause may be of benefit.  

The AICG formed a Working Group to consider the request in more detail, following whihc a Consultation Draft was issued in early May 2021 (CD59).

AICG Consultation Draft 59 (CD 59) Covering Letter and Draft Clause

Following the consultation period, the AICG published a Business Continuity Event Insurance Period Extension Clause (AVN141) on 3 August 2021 (see below).

AVN141 Business Continuity Event insurance Period Extension Clause

Following the circulation of Consultation Draft 59 (CD59), the AICG has now confirmed publication of a new Business Continuity Event insurance Period Extension Clause (AVN141).

The Publication Letter, incorporating the new clause, can be accessed below.

AVN141 Business Continuity Event insurance Period Extension Clause Publication

Aviation Insurance Clauses (AICG) CD58 Publication of Software Clauses

Following the request back in August 2019 for the Aviation Insurance Clauses Group (AICG)to consider publication of a Model AVN clause addressing cyber risks, the Group published ‘CD55 Software Limitation Clause for market consultation.

After the initial round of consultations the AICG was asked to produce a Suite of Software Limitation Clauses, published to market consultation in April 2020 as CD56. These Consultation Drafts were circulated to Union Members and posted to the AICG Section of the Union website at the time they were issued.

The AICG received a large number of comments on CD56, primarily concentrated around the definitions used in the clauses, the intended scope of cover provided and how the drafting would apply to practical liability scenarios. Following extensive discussion, the AICG consulted on a revised suite of clauses based on a core ‘Cyber Incident’ definition (CD58). Based upon the comments received and further detailed consideration by the AICG, the AICG Chair has now agreed that a suite of clauses reverting to the approach of ‘Software’, designated AVN133 through to AVN140, be published. The individual clauses will shortly be uploaded to the AICG website.

The Union has received the publication letter for these clauses, which incorporates some drafting comments, along with the clauses (AVN133/AVN134/AVN135/AVN136/AVN137/AVN138/AVN139 and AVN140). These documents can be downloaded from the link below.

AICG Consultation Draft 58 (CD58) - Further revisions to the Cyber Incident Clauses

Following the circulation of AICG Consultation Drafts CD55 and CD56 in August 2019 and April 2020 (see below), and in light of further feedback and comment, a further set of Consultation Drafts, CD58, have now been issued by the AICG for consultation.

The letter outlining the latest position, along with the relevant drafts, can be found below.

If you have any feedback or comments to make regarding these drafts, please refer them to Chris Jones, the Secretary of the AICG, using the contact details shown on the AICG Letter.

The closing date for comment is Wednesday 2 September 2020.

AICG Consultation Draft 57 (CD57) Publication of Grounding Liability Clauses

In July 2020, AICG considered a request from a market entity to draft a suite of AVN clauses addressing grounding liability. In line with the AICG Terms of Reference, the AICG Chair considered that this request was reasonable and draft clauses were published for market consultation (CD57). These drafts were circulated to Union Members and posted to this section of the Union website.

The AICG received a number of responses to CD57 which led to some drafting amendments. The AICG Chair has now agreed that the suite of Grounding Liability clauses, designated AVN128 through to AVN132, be published forthwith.

The AICG Publication Letter, along with the clauses, can be found below.

Consultation Draft 56 (CD 56)
A Suite of Software Clauses

Following the extended discussions and consultations on AICG Consultation Draft 55 (CD 55), and the subsequent decision to put the Draft on hold, the AICG  issued a suite of Software Clauses that looked to manage cyber risks in line with the requirements of the UK regulator, the Prudential Regulation Authority, and Lloyd's in respect of clarification of cyber exposure.

The consultation drafts (below) were made available for 30-day consultation, with the consultation period closing on 8 May 2020.

Following feedback received by the AICG to CD 55, a further set of Consultation Drafts (CD 58) were issued on 3 August 2020 (See Above).

AICG Consultation Draft 55 (‘CD55’)
Software Limitation Clause

In May 2019, AICG received a request from a market participant to consider publishing a model AVN provision addressing cyber risks. A consultation Draft ('CD55') was circulated with an extended consultation period, originally finishing in October 2019. However, due to the complexity of the subject, and ongoing discussions between London Market insurer and broker associations, the consultation was put on hold.

CD55 has been subsequently been superceded by a suite of Software clauses, issued for consultation by the AICG as CD56, in April 2020 (see above).

AICG Consultation Draft 54 (‘CD54’)
Aviation Spares and/or Equipment All Risks Insurance Policy

 
In late 2017, AICG received a request from a market participant to consider drafting an AVN provision addressing Aviation Spares and/or Equipment. In line with the AICG Terms of Reference, the AICG Chair considered that this request was reasonable and a working group was formed to develop this further. 

AICG felt that the best way to approach this was to draft two provisions. The first part of this work was to develop an endorsement that, where appropriate, could be attached to AVN aircraft wordings. This was completed and AVN123 published in February 2018. The second tranche was to develop a standalone Spares wording and a draft is now completed for market consultation. The wording is shown below and will also shortly be added to the AICG website.

The Deadline for comments or submissions on this draft has now passed, submissions were made by the LCSG, and certain members. Any updates will be published here.

CD 53 Aviation Premises, Hangarkeepers and Products Liability Insurance Policy 

 
In late 2017, AICG received a request from a market entity to consider drafting an AVN provision addressing Aviation Premises, Hangarkeepers and Products Liability Insurance. As a result of this approach, the AICG established a Working Party, and the resulting Consultation Draft, CG 53, has now been made available for consultation.

The Deadline for comments or submissions on this draft has now passed. Any updates will be published here.

CD 50 Data Exclusion Clause

Following an approach from a market participant in late 2016, the AICG is assessing the treatment of cyber risks, particularly in relation to damage to tangible property and/or bodily injury. This work is ongoing, but on 29 September the AICG issued Consultation Draft 50 (CD 50), a draft clause, issued for market consultation, that deals with data.

A copy of the covering letter, and the consultation draft can be accessed below. The Deadline for comments or submissions on this draft has now passed, submissions were made by the LCSG, and certain members. Any updates will be published here.