Presented by Aoife O’Sullivan Partner Lease Contracts – How to Negotiate the Insurance Provisions in your Lease Russian Aviation Insurance Conference 9th December 2009 Moscow

2 Common Issues Contract Parties Assignments of Insurance Level and type of cover Hull Releases/salvage

3 Contract Parties/Loss Payee AVN 67B/C - the “Contract Parties” are elevated to the status of an Additional Insured under the policy and therefore have an interest in the proceeds of the insurance policy as an insured. This gives them greater status than just being named as a “loss payee” and, in the event of a Total Loss, the insurance proceeds will be paid either to, or to the order of the Contract Parties. Difficulty with hull releases

4 Assignments of Insurance Single aircraft or fleet? What is being assigned? Passenger liability At what point in time is it assigned? Acknowledgement by the Insurer

5 Level and Type of Cover Minimum levels of insurance required by aircraft operators and air carriers in respect of third party cover, passenger cover, baggage, cargo and cover for risks of war and terrorism. Dependent upon the number of passengers carried and in relation to third party cover the MTOM (Maximum Take Off Mass) of the aircraft concerned. TLO/ D&O Insurance/Legal Defence Piercing the corporate veil

6 Third Party Insurance - Regulation (EC) No 785/2004 CATMTOM (kg)MINIMUM INSURANCE (MILLION SDRs)(Million Sterling * ) Approximate only 1Up to , , , , , , , , , , , , , , ,000 plus

7 Hull Releases/Salvage Subrogated claim against third parties responsible for the accident Selling salvage in the aircraft wreckage – at what price and in whose interest? Taxation issues Agreed Values

8 Practical Tips Documentation bible Lease terms review by broker

Gates and Partners Aviation and Commercial Lawyers 20 St. Mary At Hill London EC3R 8EE Tel: +44 (0) Fax: +44 (0) Thank You