Which of the following statements about insurance in aviation sector is/are correct ? 1. 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment. 2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault. Select the answer using the code given below :
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2 ✓ UPSC's answer
- (d) Neither 1 nor 2
Why the answer is (c)
• Aviation hull insurance covers physical loss of or damage to the aircraft itself — airframe, engines and installed equipment — whether on the ground or in flight; statement 1 is correct.
• The Montreal Convention of 1999, ratified by India in 2009 through the Carriage by Air (Amendment) Act and now in force in well over 130 states, replaced the Warsaw system for international carriage.
• Under it, airlines are strictly liable for passenger death or injury up to a first tier (about 128,821 SDRs, roughly ₹1.5 crore) without the claimant having to prove fault; beyond that, liability is unlimited unless the airline proves it was not negligent — statement 2 is correct.
• These rules were in the news after the Air India Ahmedabad crash of June 2025, when compensation under the Convention was discussed.
• Hence both 1 and 2, option (c).
Why the other options are wrong
- (a) 1 only
- Statement 2 on strict liability under the Montreal Convention is also correct.
- (b) 2 only
- Statement 1 on hull insurance is also correct.
- (d) Neither 1 nor 2
- Both statements are correct.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2026, held on 24 May 2026. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.