You must have passenger liability insurance when carrying passengers for hire or reward to, from or within Australia.
Carriers' liability insurance
Carriers must hold insurance to ensure passengers receive compensation if they suffer:
- personal injury.
We are responsible for administering and enforcing Commonwealth compulsory insurance schemes:
- Part IVA of the Civil Aviation (Carriers' Liability) Act 1959
- Civil Aviation (Carriers' Liability) Regulations 2019
Definition of a carrier
A carrier is a person who holds an:
- Australian air transport air operator's certificate (AOC) authorising passenger services
- authorisation, such as a Part 129 AOC and section 25 or 26 permission, for the transport of passengers on an international flight.
Passengers carried in aerial work aircraft are also covered by the Civil Aviation (Carriers' Liability) Act 1959.
Acceptable contract of insurance
The liability limits in your insurance policy must be:
- $925,000 for passengers on a domestic carrier for injury or death resulting from an accident
- $480,000 Special Drawing Rights (currently approximately AU$975,000) for passengers on an international flight
- liability insurance for the loss or destruction of:
- registered baggage ($3,000)
- non-registered baggage ($300).
Your insurance policy must not be voidable by your insurance provider if:
- you fail to comply with safety requirements
- you become insolvent
- there are risks associated with computer date recognition errors or failures.
You must hold insurance for all type and models of aircraft you use.
Before we issue an AOC or section 25 or 26 permission, you must submit a suitable certificate or declaration of insurance.
If you start, vary or renew a contract of insurance, you must provide us with evidence of your insurance.
Once you arrange suitable insurance, including variations or renewals of existing contracts, your insurer will issue you with an insurance declaration that states you have insurance that complies with legislation requirements. You should forward this insurance declaration to us within 14 days of the start of the contract.
You can submit declarations of insurance by going to our online contact centre and filling in the relevant contact form.
If you have multiple insurance policies, you need to:
- submit copies of insurance declarations signed by each insurer or broker
- ensure that the insurance declarations will give complete coverage for all passenger risks
- ensure that insurance declarations will give full aircraft fleet coverage.
Providing evidence of insurance
If we have doubts about the currency or acceptability of your insurance contract, we may ask you to provide further details of the carrier's insurance arrangements.
This can occur when:
- a certificate or declaration of insurance is lapsed or cancelled
- you have added new types or models of aircraft to your AOC and your insurance does not cover them
- we have reason to believe that a policy does not meet the legislative requirements.
Cessation or withdrawal of operating approvals
We may suspend or cancel your AOC if you do not:
- comply with the requirements of the Civil Aviation (Carriers' Liability) Act 1959
- hold the requisite insurance.
You cannot conduct a flight in an aircraft when you do not have carriers liability insurance.
Read section 28BA(2A) of the Civil Aviation Act 1988 for further information.
Penalties for prohibited carriage
It is a criminal offence to carry passengers for hire or reward without an acceptable contract of insurance that meets the requirements of the Civil Aviation (Carriers' Liability) Act 1959.
A person convicted of an offence may face heavy fines or imprisonment. We may also apply for an injunction to prevent a carrier from conducting operations that breach the legislation.
Obligations on insurers
The Civil Aviation (Carriers' Liability) Regulations 2019 requires an insurer, under an acceptable contract of insurance, to give us written notice of either of the following events within 3 business days before the event:
- a modification of the contract that will result in the contract no longer meeting a prescribed requirement mentioned in subsection 41C(2) of the Act.
- the cancellation of the contract by the insurer.
The insurer must also tell us if the insurance is not renewed within 3 business days after the contract expires.
Failure of an insurer to do so will result in the insurance being no longer taken to be of effect after the time periods expressed in the regulations.
Suitable evidence of insurance
Insurers should be familiar with the legislative requirements of carrier's liability insurance. If they are unfamiliar, we have provided 2 samples that outline our preferred format.
- Sample declaration 1 insurance broker: includes suitable certification at item 6 to show coverage for risks associated with date recognition errors and failures. The certificate should include one of the 2 statements at item 6.
- Sample declaration 2: includes suitable certification at item 10 to show coverage for risks associated with the date recognition errors and failures. The certificate should include one of the 2 statements at item 10.