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Related Solutions

Willis has extensive experience of working with the providers of maintenance, repair and overhaul (MRO) services to the aerospace industry. In many cases these services are provided "in-house" by the airlines or aircraft operators, and these services are often marketed to other operators. However, it is becoming increasingly common for airlines to contract independent third parties to provide ad-hoc as well as scheduled MRO services, as it is more economical for a small or medium airline to have its own facilities.

Risk Factors
There is a combination of risk exposures that makes the MRO third party liability risk unusual in the aerospace industry, and all must be taken into account in arriving at the ideal solution in the aviation insurance market. For example:

  • Damage to aircraft while under the MRO provider's care, custody and control, either on the ground or during a test flight
  • Damage to components while being worked on at the MRO provider's facility
  • Faulty workmanship causing the failure of a component or system in an aircraft in flight after it has been returned to the customer
  • Injury to customers or other personnel while on the premises.

Much of the work performed by independent MROs is in the military field. Military authorities around the world have similarly recognised that external commercial contractors can be better placed to perform certain tasks, for example deep maintenance or modification work with specialist facilities, than if the authority has to divert manpower and resources to doing so itself. The same risk exposures exist, but the level of risk is somewhat less since the aircraft are not returned for commercial activities in the litigious civil world.

Willis Expertise
Willis will work with the MRO provider to identify the most practicable solutions, balancing ideal cover against cost. It is recognised that there will probably be a reasonable number of relatively minor accidents - for example minor damage to aircraft while undergoing maintenance - but the catastrophe element must also be addressed. Part of this task can be carried out as an on-site risk review - Willis employs independent consultants who are available to provide a range of risk management services ranging from ramp safety audits and contractual risk reviews to full business risk surveys, covering all the risks which an MRO provider as a commercial business can face. By working together with our clients in this task we can help to present the risk exposures in the best possible light to insurers. At the same time by identifying the risk exposures, loss prevention measures can be put in place.

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