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Aviation History
1936
1936 - 1344.PDF
MAY 21, 1936- FLIGHT. 54? INSURANCE and AIR TRANSPORT Capt. A. G. Lamplugh Writes on the Future of Aviation Insurance and the Implications of the Air Navigation Bill in Regard to the Subject IT has been truly said that insurance has done much to stabilise the rather exceptional hazards of aviation. It is already an effective influence in encouraging the sound and economic design and operation of aircraft, and will continue to be so. In almost all its aspects aviation is an expensive and uneconomic business, and those who have pioneered and have dedicated their lives to the development of civil air transport as an important factor in the peaceful development of civilisation realise that any influence that can be brought to bear to stabilise and economise operation must be for the ultimate good of the whole business. The Gorell Com mittee, for instance, has proposed to hand over, or perhaps more correctly to delegate, certain powers previously held by the Air Ministry to a body of representatives of underwriters, operators and constructors, and one of the underlying reasons for the acceptance of this doctrine by the Air Ministry is that it must tend to encourage the economic influence of aviation both in design, construction and operation. I "would like to stress the importance of desirable economy in developing the business, in which hundreds of thousands of pounds —in fact, it would not be an exaggeration to say millions —have been wasted through sheer ignorance of what is or what is not reasonably safe and practical. Aviation has burst (or, perhaps more literally, has crashed) upon a world of transport which, generally speak ing, was well appreciated by the whole community, and the insurance world in general is trying to assimilate or digest a form of hazard of which it has no previous experience. In years to come, of course, the insurance world will have absorbed and appreciated a knowledge of aviation much as it has done of other forms of transport, but unless aircraft constructors and operators are going to consider these important factors there is no doubt whatever that the present tendency to increase insurance rates will continue. In a few years' time, if we look back upon the last two or three years, we shall in all probability find the insurance of other forms of transport has provided an indirect subsidy to aviation not far below that of the subsidies provided by the Government. The author : Capt. A. G. Lamplugh, F.R.Ae.S., M.I.Ae.E., F.R.G.S., of the British Aviation Insurance Co., Ltd., needs no introduction to those in the flying movement ; a pilot of considerable experience, he fulfils a number of important posts, being inter alia, Warden of the G.A.P.A.N., President of the London Gliding Club, and a member of the Civil Airworthiness Committee. geuce. Under the new Act his liability under the last two headings will be limited to a maximum of from £5,000 to £"25,000, according to the size of the machine which he is operating. Under the first heading, his liability will remain unlimited as at present. In theory, therefore, the new Act should decrease the liability of the aircraft owner and operator, but in practice it is unwise to assume that this will prove to be the case. Compulsory insurance for road transport has led to a greatly increased number of claims and a great increase in the amount of damages awarded in the courts. If this is the case in instances where the plaintiff has to prove negligence before he can recover, it is probably a fair assumption that it will be even more the case as regards aircraft, where the plaintiff has not got to prove negligence. Sharing the Burden His late Majesty King George the Fifth once recalled the truth that insurance is no more than laying the burdens and misfortunes of the few upon the shoulders of the many. The main purpose of this article is to emphasise with all earnestness the desire to proceed with our techni cal development in a manner which shall at all costs avoid imposing an unnecessary and wasteful burden upon the community; and this applies to every individual engaged, whether professionally or privately, in the busi ness. Design can and must be considered more in the light of easy handling, maintenance and repairs. The aircraft operator and his pilot must also take a large share of praise or blame in skill and economy in operation. To give them a fair chance we must so revise our regulations of design, construction and opera tion that the same standards of safety shall exist (if not be increased)—but with a very drastic cut in the cost of these services. It is too early as yet to forecast with any degree of certainty what will be the effect of the insurance pro visions of the Air Navigation Bill. Broadly speaking, the present position is that the owner of the machine is liable to an unlimited extent, irrespective of whether he is guilty of gross negligence, negligence, or no negli- A Two-edged Sword Aviation insurers will naturally be anxious to avoid increasing third-party premium rates. This is not a ques tion of altruism, but of sheer business common sense. The increase of aviation insurance business is bound up with the increase of civil aviation, and the imposition of any burden tending to discourage the growth of civil aviation automatically recoils upon the insurers. On the other hand, it must be borne in mind that at the moment, the cost of insurance is divided between a very small number of insured, as compared with motor car insurance for example. It follows logically that if there should be a series of disasters involving third-party damage, or even one major disaster, the market would be bound to be adversely affected. So far aviation in this country has been fortunate in avoiding such occurrences, and if the provisions of the Bill pass into law in their present form we can only hope that this immunity may continue, at any rate until such time as civil aviation has become more firmly established, so that the risk can be spread over a reasonable number of insureds. I conclude by repeating again the maxim that "insur ance is no more than laying the burdens and misfortunes of the few upon the shoulders of the many," and by expressing the hope that as the result of the new Act the misfortunes rtiav be rendered fewer and the shouldera rendered both .broader and more multitudinous.
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