What Is Aviation Products Liability and Completed Operations Insurance?
Aviation products liability insurance deals with the legal liability of a business that manufactures, repairs, supplies or services an aircraft, engine, component, part, fuel or similar product, for bodily injury and property damage arising after the product or work has left its control. Completed operations liability is a separate concept used for losses arising after work such as maintenance, repair or installation has been completed and the aircraft has been handed back; in a policy it may appear together with products liability or as a separate cover.
Hull and airline liability are on the Aviation Insurance page. The part of hangarkeeper and MRO liability that relates to aircraft taken into custody is also dealt with on that page; this page focuses on products and completed operations liability. This page is general information; it does not imply the scope, acceptance, price or any payment guarantee of a particular policy.
Products, Completed Operations, Hangarkeeper and Airline Liability
The following types of liability do not replace each other; the source, timing and injured party of the loss determine which one responds.
Scroll the table horizontally to see all columns.
| Injured party / timing | Who needs it | |
|---|---|---|
| Products liability | Bodily injury and property damage to third parties or passengers after the product has left the insured's control | Manufacturers, parts suppliers, distributors |
| Completed operations | Loss arising after maintenance, repair or installation is completed and the aircraft is handed back | MRO and repair businesses, organisations carrying out modifications |
| Hangarkeeper | Damage to a third party's aircraft taken into custody while in the insured's care | MROs, FBOs, flight schools, hangar operators |
| Airline / operator liability | Third-party and passenger loss arising from operating the aircraft | Aircraft operators |
| Airport operators liability | Third-party loss arising from the airport site and operations | Airport operators; see Airport Operators Liability Insurance |
Who Is It Important For?
- Aircraft, engine and component manufacturers: products liability arising from design, manufacture and quality systems; the risk that one defect in series production gives rise to many losses
- Parts suppliers and distributors: traceability, certified part documents and the supply chain; fitting of a faulty part to an aircraft
- MRO businesses: completed operations risk for an aircraft handed back after maintenance, repair and modification
- Fuel and ground service providers: loss arising from fuel quality, contamination or service error
- Avionics and software suppliers: loss arising from system failure; for cyber elements see Cyber Insurance
Points to Watch in the Cover Structure
- Limit structure: a limit for each occurrence and an annual aggregate limit; whether products and completed operations have separate aggregates
- Basis of cover: policy structures built on when the loss arises or when the claim is made, and any retroactive date provisions, should be confirmed from the policy
- Series loss and batch provisions: whether many losses arising from the same defect count as one occurrence or separate occurrences
- Territory and jurisdiction: the countries where the product is used and the jurisdiction in which suit may be brought; geographical and jurisdiction limits in the policy can affect premium and cover
- Vendor provisions: whether a distributor or customer is given vendor or additional insured status
- Defence costs: whether they are within or in addition to the limit
Matters Generally Excluded or Structured Separately
- Grounding: loss of income arising from a fleet being grounded because of a product defect is generally outside the products liability limit; a separate grounding cover may be needed
- Recall: the cost of recalling, replacing or correcting a product is generally outside standard products liability cover
- Damage to the insured's own product: the value and repair cost of the part the insured made or repaired is generally outside cover
- Contractual liability: additional liabilities assumed in customer contracts should be checked for consistency with the policy
- War and terrorism: for the war exclusion and cover-back structure in aviation policies see Aviation War Risks Insurance
- Professional error: for professional error in design, engineering or approval services see Professional Indemnity Insurance
This list is an example; which items are excluded or covered back by an extension depends on the policy wording.
Approved Organisations and Insurance in Türkiye
Organisations that manufacture aviation products or carry out maintenance operate in Türkiye under SHGM approvals; in the European Union comparable approvals are governed by EASA Part-21 (production) and Part-145 (maintenance). The current approval legislation applied in Türkiye is not set out in detail on this page and should be verified from the relevant SHGM text. The scope of the approval and the limits of the activity affect the insurer's assessment; which approval covers which activity should be checked from the organisation's own certificate.
What Information Is Needed for a Quotation?
- Type of activity: manufacture, repair, distribution, maintenance, or fuel and ground services; list of products and services
- Approvals and certificates held and their scope
- Annual turnover, export share and the countries where the products are used
- Limits and additional insured requirements requested in customer contracts
- Quality and traceability system; supply chain practices
- Requested limit, and any completed operations and grounding needs
- Loss history
This list is an example; the information and documents requested vary by insurer and policy structure. Acceptance, requests for further information and terms rest with the relevant insurer.
Frequently Asked Questions
What is aviation products liability insurance?
What is the difference between products liability and completed operations liability?
Does a hangarkeeper policy cover completed operations risk?
What is grounding insurance and is it part of products liability?
Are recall costs covered?
Is aviation products liability insurance compulsory in Türkiye?
What information is needed for a quotation?
Neolife's Role
Neolife Group can assess the relevant information and contracts, explore suitable local insurance and reinsurance solutions, carry out placement work and compare the quotations received. This does not imply the capacity of any particular insurer or reinsurer, acceptance of cover, price or any commitment to pay; these are subject to the rules of the relevant insurer, to legislation and to the policy terms.