Aviation war insurers cancel some cover for Israel, Lebanon

Aviation war insurers have given notice to cancel cover for some airlines domiciled in Israel and Lebanon because of the conflict in the region, with some cancellations already taking effect, three industry sources with direct knowledge of the matter said. Aviation war insurers based in Europe, the United States and the Lloyd's of London market can issue a 7-day notice of cancellation or other changes to terms and conditions in the event of a major conflict they feel will make the long-term insurance risk too great. Insurers for Israeli flag carrier El Al Airlines, Israir and Arkia have previously said they can issue such notices due to the war between Israel and the Palestinian group Hamas. Israeli airlines have now received the notices, two sources told Reuters, without naming the airlines. "War underwriters' appetite for continuing to cover these risks for no additional reward differs and some are now looking to withdraw cover, especially given the news the Israeli government has provided a backstop to cover flights," said Bruce Carman, chief underwriting officer at Hive Underwriters. Israeli's parliamentary finance committee last week approved a plan to provide a state guarantee of $6b to cover insurance against war risks to Israeli airlines. Spokespeople for Israeli airlines El Al and Arkia did not directly respond to questions from Reuters about whether insurers had served notice but said the government was providing all necessary coverage for them to continue operations safely. A spokesperson for Israir said it had not been served notice by its insurers, but did not provide additional details. A spokesperson for Lebanese carrier Middle East Airlines did not immediately respond to requests for comment. Israeli carriers have continued to fly while most foreign airlines have cancelled flights to Tel Aviv, expanding flights to bring back those travelling abroad and those called up to reserve service for the military. Airlines normally take out two types of policy - an "all risks" policy which covers both regular damage to the hull and passenger liability, and a "war" policy to cover war or terror-related losses to the aircraft.<br/>