Information for air operators

Carriers' liability insurance
Compulsory insurance against liability for death or injury to air passengers

Each carrier who carries passengers for hire or reward to or from Australia, or within Australia, is required to have in place passenger liability insurance which ensures that compensation will be paid in respect of death or personal injury suffered by passengers on the carrier's aircraft.

The Civil Aviation Safety Authority (CASA) is responsible for administering and enforcing the Commonwealth and State compulsory insurance schemes - refer to Part IVA of the Commonwealth Civil Aviation (Carriers' Liability) Act 1959; Civil Aviation (Carriers' Liability) Regulations and complementary State legislation (together referred to as "the legislation") .

Carriers are required to have satisfactory insurance and a current Certificate of Compliance from CASA to be able to carry passengers for hire or reward.

What is a "carrier"?

For the purpose of the legislation a carrier is a person who:

• holds an Australian Air Operators Certificate or other operating approval authorising passenger charter or Regular Public Transport (RPT) operations (for convenience, the various permission types are hereafter referred to as an Air Operators Certificate or "AOC"); or
• offers to transport passengers to, from or within Australia on aircraft operated by another carrier.

What type of insurance is required?

The type of insurance required is prescribed in the legislation. Details of the prescribed requirements of the legislation may be obtained from CASA. Amongst other requirements, it is essential that your insurance policy grants you a right of indemnity in respect of personal injury liability:

• for an amount not less than $500,000 (for domestic carriers) or 260,000 Special Drawing Rights (for international carriers) per passenger; and
• which cannot be voided by an insurer in the event that you fail to comply with safety requirements or become insolvent.

You are expected to hold insurance which covers all of the types/models of aircraft by which you are authorised to operate Regular Public Transport or charter operations under your AOC.

It is important to note that an insurance policy will only constitute an "acceptable contract of insurance" for the purposes of the legislation if CASA has issued a Certificate of Compliance to a carrier in relation to the policy.

Obligations of foreign carriers

As a foreign carrier you are required to hold a Certificate of Compliance if you:

• hold a current AOC which authorises the carriage of passengers for hire or reward to, from or within Australia; or
• offer to transport passengers to/from Australia on your aircraft or aircraft operated by another carrier on your behalf (includes code-share and similar joint venture operations).

Also, you may be required to hold a Certificate of Compliance if you:

• physically transport passengers by air to/from Australia on behalf of another carrier, under a wet lease or other commercial arrangement (Note: in this situation you may, or may not, have an obligation to hold a Certificate of Compliance depending on which international aviation treaties your country is a party to).

In the circumstances described above, foreign carriers have the same obligations and responsibilities as Australian carriers (as outlined in this brochure). Carriers who conduct cargo/freight operations to/from Australia may also be required to hold a Certificate of Compliance. (Refer to paragraph "What is a 'passenger'?")

If you have any questions about your obligations as a foreign carrier under the legislation please contact CASA's Insurance Helpline for more information.

Multiple insurers

If you have a number of policies with different insurers covering the types/models of aircraft on your AOC, copies of insurance declarations signed by each insurer or broker should be submitted to CASA together with a single application form. It is essential that the insurance declarations will together give complete coverage for all passenger injury risks including full aircraft fleet coverage.

What is a "passenger"?

CASA takes the view that a passenger is any person who is carried, or to be carried, by a carrier other than a member of the aircraft operating crew who has duties in relation to the flying or safety of the aircraft.

A carrier must have insurance in place to cover all passengers carried on commercial flights including passengers carried on freight/cargo flights. The legislation provides that a person who is an employee of the carrier travelling in the course of his/her duties as an employee may be excluded from the insurance policy.

Expiry of certificate

Certificates of Compliance issued by CASA will lapse on the date of expiry printed on the certificate unless the certificate is revoked by CASA before this date.

To ensure that you receive a new Certificate of Compliance before your current certificate expires, your application must be submitted to CASA a minimum of 3 business days before the expiry date.

CASA has no obligation to remind carriers about the need to renew their insurance cover - you should not rely on CASA to remind you of the need to renew your Certificate of Compliance.

Power to revoke a certificate

CASA may revoke a Certificate of Compliance issued to a carrier if, for any reason, the carrier's existing insurance arrangements no longer satisfy the legislative requirements. This situation could arise when:

• an insurance policy, which formed the basis of a previous decision by CASA to issue a certificate, lapses, is cancelled or varied by an insurer; or
• new types or models of aircraft are added to an AOC and the insurance in place does not cover these types/models; or
• there is a change in the person(s) or company(ies) holding an AOC and a new AOC is issued; or
• CASA has found that a policy otherwise does not meet the prescribed requirements of the legislation.

Penalties

A carrier intentionally carrying passengers for hire or reward without a Certificate of Compliance issued by CASA will commit a criminal offence. A carrier convicted of an offence may face fines or imprisonment. In addition, CASA may apply to a court for an injunction to prevent a carrier from conducting operations which are in breach of the legislation.

The requirement for a carrier to have acceptable insurance in place is reinforced by section 28BI of the Civil Aviation Act 1988 ("the Act"). In addition, compliance with this requirement is considered by CASA to be relevant to a carrier's "care and diligence" responsibilities under section 28BE of the Act. CASA may suspend or cancel a carrier's charter/RPT approval where section 28BI or 28BE is breached.

Your responsibilities

As a carrier you must apply to CASA for a Certificate of Compliance in the following circumstances:

• when you are issued with an Australian AOC and propose being a carrier;
• when you apply to CASA to add new types/models of aircraft to, or to vary the authorisations of, your AOC;
• when there is a change to the particulars of the person(s) or company(ies) holding an AOC;
• each time you renew or vary your insurance cover.

You are solely responsible for arranging insurance that meets the requirements of the scheme.

Once you have obtained suitable insurance:

1. your insurer or broker will issue you with an insurance declaration that states that you have insurance that complies with the requirements of the legislation.
2. you should forward this insurance declaration to CASA together with a completed application form.
3. If CASA is satisfied that the requirements of the legislation have been met, you will be issued with a Certificate of Compliance that is valid for the duration of the insurance cover. If multiple insurance policies are involved, the Certificate of Compliance may be limited to the period where all policies are in force.

You can apply for a CASA certificate of compliance by:

1. obtaining formal insurance declaration(s) from your insurer(s) or underwriting pool(s); and
   (You or your insurer may contact CASA to obtain samples of suitable insurance declaration formats and wording)
   
2. sending by facsimile or mail the insurance declaration(s), together with a completed application form to CASA.

Certificate of Compliance Application

Suitable evidence of insurance

It is necessary for insurance companies to provide carriers with suitable evidence of insurance in the form of a certificate/declaration.

Australia's major insurers are familiar with the types and formats of certificates/declarations of insurance which are acceptable to CASA.

For the benefit of insurers (eg. foreign insurers) who are not familiar with CASA's requirements, this page includes two sample certificates/declarations of insurance which reflect CASA's preferred formats.

A certificate/declaration of insurance presented in either of the formats shown at Sample 1 and Sample 2, is likely to be accepted by CASA.

Sample 1

Note: It is a requirement that an insurance contract does not exclude coverage for risks associated with computer date recognition errors/failures. For this purpose the sample certificate (No. 1) includes suitable certification (two options are given) at item 6 to show that risks associated with date recognition errors/failures are covered. The certificate should include one of the two statements at item 6 (ie. it is not necessary to include both statements).

Sample 1 (RTF document 14.6KB)

Sample 2

Note: It is a requirement that an insurance contract does not exclude coverage for risks associated with computer date recognition errors/failures. For this purpose the sample certificate (No. 2) includes suitable certification (two options are given) at item 10 to show that risks associated with date recognition errors/failures are covered by the insurance policy. The certificate should include one of the two statements at item 10 (ie. it is not necessary to include both statements).

Sample 2 (RTF document 15.5KB)

How to contact CASA's insurance helpline