Insurance and reinsurance

Captive insurance

Summarise any captive insurance regime in your jurisdiction as applicable to aviation.

No such captive insurance regime is applicable to aviation in Austria.

Cut-through clauses

Are cut-through clauses under the insurance and reinsurance documentation legally effective?

As Austrian law does not generally provide for a prohibition of cut-through clauses, an agreement foreseeing such cut-through clause on behalf of a policyholder is, in our view, legally effective.

Reinsurance

Are assignments of reinsurance (by domestic or captive insurers) legally effective? Are assignments of reinsurance typically provided on aviation leasing and finance transactions?

Assignments of reinsurance are legally effective. Assignments of insurance claims are typically provided for in aviation leasing and finance transactions, whereas assignments of reinsurance claims cannot be regarded as being typically provided for.

Liability

Can an owner, lessor or financier be liable for the operation of the aircraft or the activities of the operator?

Unless owners, lessors or financiers do not have operational control over the aircraft they cannot be held liable for the operation of the aircraft.

Strict liability

Does the jurisdiction adopt a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft?

Austrian law has not adopted a regime of strict liability for owners, lessors, financiers or others with no operational interest in the aircraft as Austrian law has adopted a regime of strict liability for the operator. If aircraft are being operated by more than one operator, these operators shall generally be jointly and severally liable.

Third-party liability insurance

Are there minimum requirements for the amount of third-party liability cover that must be in place?

The minimum requirement for the amount of third-party liability cover under Austrian law depends on the maximum take-off mass of the aircraft. The limits of liability that need to be covered by liability insurance range from 750,000 special drawing rights (as defined by the International Monetary Fund) for a maximum take-off mass of less than 500kg to 700 million special drawing rights for a maximum take-off mass of more than 500 tons.