You must have passenger liability insurance when carrying passengers for hire or reward to, from or within Australia.
The carriers' liability insurance scheme
The compulsory insurance scheme was established by the Commonwealth Government, in partnership with the states.
It helps passengers and their families to get fair compensation if they are injured or die as a result of an accident while flying. It also sets a maximum liability amount for air carriers.
The scheme is set up under:
- the Civil Aviation (Carriers’ Liability) Act 1959 (the CACL Act)
- matching laws in each state.
Requirements for holding carriers’ liability insurance
Any operator who is an air carrier must have carriers’ liability insurance.
You are an air carrier for these purposes if you:
- hold an Australian air transport air operator's certificate (AOC) under Part 119 of the Civil Aviation Safety Regulations 1988 (CASR)
- hold a balloon and hot air airship AOC under CASR Part 131
- have permission (like a CASR Part 129 AOC, or an approval under sections 25 or 26 of the Civil Aviation Act 1988) to carry passengers on international flights.
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.
Air Transport and Balloon Transport AOCs (as defined in the CASRs) were previously known as charter or regular public transport (RPT) AOCs under the Civil Aviation Regulations 1988 (CAR). Transitional provisions in the CASR ensure that it is clear that charter and RPT operations are now known as Air Transport operations.
If you hold an aerial work certificate as well as one of the permissions mentioned above, your aerial work passengers may also be covered under the Carriers’ Liability scheme.
This follows decisions made in certain state courts which have held that air transport AOC holders engaged in aerial work are covered by the CACL Act for those aerial work operations that involve carriage of passengers. You may wish to seek legal advice to understand how this affects your liability.
You do not need carriers’ liability insurance if you only have:
- a Part 137 aerial application AOC
- a Part 138 aerial work certificate
- a Part 141 flight training certificate
- a Part 142 flight training AOC.
Operators who are not covered by the CACL Act:
- are not covered by the legislated liability caps
- may therefore have unlimited or higher liability than the caps on air carriers
- should consider holding insurance appropriate to their operations covering their potential liability.
Our role
CASA makes sure operators have the appropriate insurance where they are required to have Carriers’ Liability insurance. We do this under the:
- CACL Act
- Civil Aviation (Carriers' Liability) Regulations 2019 (CACL Regulations)
- Civil Aviation Act 1988.
We will ask for proof of your insurance when:
- you apply to become an air transport or balloon transport operator (air carrier)
- we renew your AOC under CASR Part 119 or Part 131.
Acceptable contract of insurance for air carriers
Under the CACL Act, the liability limits in your insurance policy must be:
- $925,000 per passenger 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 types and models of aircraft you use in your operations.
Evidence of insurance
You must submit a suitable certificate or declaration of insurance before we issue:
- an air transport or balloon transport AOC
- a section 25 or 26 permission.
If you start, vary or renew a contract of insurance, you must provide us with evidence of your insurance.
Your insurer will issue you with an insurance declaration. This will state you have insurance that complies with the applicable legislative 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 contacting us.
Multiple insurers
If you have multiple insurance policies, you need to:
- submit copies of insurance declarations from each insurer or broker
- ensure that the insurance declarations will give complete coverage for all passenger risks
- ensure that insurance declarations will give full coverage for all aircraft in your fleet.
Cessation or withdrawal of operating approvals
We may suspend or cancel your AOC if you do not:
- comply with the requirements of the CACL Act,
- hold the requisite insurance.
You must not carry passengers in an air transport operation if 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 an offence to carry passengers in an air transport or balloon transport operation without the required carriers’ liability insurance.
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 do not comply with the legislation.
Obligations on insurers
Under the CACL Regulations, insurers must give us written notice at least 3 business days before:
- changing a policy so it no longer meets the requirements of the CACL Act
- cancelling a policy.
They must also tell us within 3 business days after a policy expires if it’s not renewed.
If they don’t notify us, the insurance will remain active for a set period of time (see regulation 13 of the CACL Regulations).
Certificates and declarations of currency
Insurers should understand the rules for showing proof of carriers’ liability insurance. If they are unsure, we provide 2 samples templates:
- Sample declaration 1 insurance broker: includes a statement at item 6 to confirm coverage for risks linked to date recognition errors. The certificate should include one of the 2 approved statements.
- Sample declaration 2: includes a statement at item 10 to confirm coverage for the same risks. The certificate should include one of the 2 approved statements.