Airlines Wouldn't Be Covered If Hit By Certain Types Of Terrorism

European insurance carriers are threatening to leave European air carriers in the lurch if they're attacked -- or used in attacks -- by terrorists who employ biological, chemical or nuclear weapons. If insurers follow through with that threat, civil aviation in Europe would be wide open to financial loss in the case of a "dirty bomb" attack.

If a dirty bomb -- a radiological explosive device -- were to be detonated at an airport, for instance, insurers and airlines are both worried about the tremendous exposure they'd face in terms of liability.

British Airways is one carrier that would be left exposed in the event insurance companies withdrew coverage of certain terror events. "We are aware that some insurers have withdrawn some aspects of their insurance cover in relation to radiological, chemical or biological attacks," BA said in a statement quoted by Reuters.

The issue comes to the surface as airlines are negotiating with insurers on policy renewals. Earlier this month the Aviation Insurance Clauses Group, a London-based insurance-industry panel, started talking about excluding coverage for "dirty bomb" claims.

"It is a potential exposure that we have at the moment," said Stephen Riley at Global Aerospace, the world's leading aviation insurance group. We and the industry have some concerns about it. Whether or not we work to limit our exposure is something we are all talking about at the moment."

FMI: www.global-aero.co.uk