Regulation (EC) No 785/2004 of the European Parliament and of the Council of 21 April 2004 on insurance requirements for air carriers and aircraft operators
Date: 2004-04-21
Institutions: Council of the European Union, European Parliament
Subjects: air space, air transport, carriage of goods, carriage of passengers, compulsory insurance, transport insurance

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(Acts whose publication is obligatory)

REGULATION (EC) No 785/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 21 April 2004

on insurance requirements for air carriers and aircraft operators

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 80(2) thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Economic and
Social Committee (2),

After consulting the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

(5)

Whereas:

(1)

(2)

(3)

In the framework of the common transport policy, and
in order to foster consumer protection, it is important
to ensure a proper minimum level of insurance to cover
liability of air carriers in respect of passengers, baggage,
cargo and third parties.

In the Community aviation market,
the distinction
between national and international air transport has
therefore, appropriate to
is,
been eliminated and it
establish minimum insurance
for
requirements
Community air carriers.

these
Common action is necessary to ensure that
requirements also apply to air carriers
from third
countries in order to ensure a level playing field with
Community air carriers.

(4)

In its Communication of 10 October 2001 regarding the
repercussions of the terrorist attacks in the United States

(1) OJ C 20 E, 28.1.2003, p. 193.
(2) OJ C 95, 23.4.2003, p. 16.
(3) Opinion of the European Parliament of 13 May 2003 (not yet
published in the Official Journal), Council Common Position of 5
December 2003 (OJ C 54 E, 2.3.2004, p. 40), Position of the
European Parliament of 11 March 2004 (not yet published in the
Official Journal) and Decision of the Council of 30 March 2004.

in order

on the air transport industry, the Commission stated its
intention to examine the amounts and conditions of
insurance required for the grant of operating licences by
to ensure a harmonised
Member States
in its Communication of 2 July
approach. Moreover,
2002 regarding insurance in the air transport sector
following the terrorist attacks of 11 September 2001 in
the United States, the Commission stated that it would
continue to monitor the developments on the aviation
the
insurance market with regard to the revision of
amounts and conditions of insurance required for the
grant of operating licences by Member States.

By Council Decision 2001/539/EC (4) the Community
concluded the Convention for the Unification of Certain
Rules Relating to International Carriage by Air, agreed
at Montreal on 28 May 1999 (Montreal Convention),
which lays down new rules on liability in respect of the
international carriage by air of persons, baggage and
cargo. These rules are expected to replace those of the
Warsaw Convention of 1929 and its
subsequent
amendments.

(6)

(7)

liability

Article 50 of the Montreal Convention requires parties
to ensure that air carriers are adequately insured to
Convention. Warsaw
that
cover
Convention of 1929 and its subsequent amendments
will
the Montreal
Convention for an indefinite period. Both Conventions
provide for the possibility of unlimited liability.

alongside

continue

under

exist

to

Article 7 of Council Regulation (EEC) No 2407/92 of 23
July 1992 on licensing of air carriers (5), requires air
carriers to be insured to cover
liability in case of
accidents,
in respect of passengers,
baggage, cargo, mail and third parties, albeit without
specifying minimum amounts
conditions of
insurance.

in particular

and

(4) OJ L 194, 18.7.2001, p. 38.
(5) OJ L 240, 24.8.1992, p. 1.

(8)

(9)

(10)

(14)

(15)

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It is appropriate to take into account the fact that the
European Civil Aviation Conference adopted on 13
December 2000 Resolution ECAC/25-1 on minimum
levels of insurance cover for passenger and third party
liability, which was modified on 27 November 2002.

(16) While the market practice of offering insurance on an
aggregate basis may be conducive to insurability,
in
particular for risks of war and terrorism, by allowing
insurers better control over their liabilities, this practice
does not release an air carrier or aircraft operator from
respect minimum insurance
the
requirements when the aggregate fixed by its insurance
contract is reached.

obligation

to

is

to

necessary

It
define minimum insurance
requirements to cover passengers, baggage, cargo and
third parties for air carriers and aircraft operators flying
within, into, out of, or over the territory of a Member
State, including its territorial waters.

Insurance obligations should remain with air carriers
with a valid operating licence, and,
in the case of
Community air carriers, with a valid operating licence
granted in accordance with Regulation (EEC) No
2407/92. The absence or expiry of such licence does
not relieve the undertaking from such obligation.

(11) While the Montreal Convention specifically regulates
liability in respect of passengers, baggage and cargo, the
liability for mail
that
Convention, to be subject to ‘the rules applicable to the
relationship between the
and the postal
administrations'. In the Community, insurance for such
liability
sufficiently regulated by Article 7 of
Regulation (EEC) No 2407/92.

is, according to Article 2 of

carriers

is

(17)

It is necessary to require air carriers to provide evidence
that they respect at all times the minimum insurance
requirements to cover liability, as provided for in this
Regulation. With regard to Community air carriers and
with regard to aircraft operators using aircraft registered
in the Community, depositing evidence of insurance in
one Member State should be sufficient for all Member
States, such insurance being effected by an undertaking
authorised to do so under the applicable law.

air

(18) With respect to overflights of the territory of a Member
State by non-Community
aircraft
registered outside the Community which do not involve
a landing on or take-off from any Member State, any
in accordance with
overflown Member State may,
international law, request evidence of compliance with
the insurance requirements of
for
example by carrying out random checks.

this Regulation,

carriers or

(12) Mandatory insurance should not be required for State

aircraft and for certain other types of aircraft.

(19)

The minimum insurance
reviewed after a period of time.

requirements

should be

(13) Minimum insurance

cover

should be provided in
situations where an air carrier or aircraft operator is
liable in respect of passengers, baggage, cargo and third
international
parties
in accordance with rules of
Conventions, Community or national
law, without
interfering with such rules.

The insurance should cover aviation-specific liability in
respect of passengers, baggage, cargo and third parties.
insurance
Regarding passengers, baggage and cargo,
should include cover
injury
caused by accidents and for loss or destruction of or
damage to baggage and cargo. Regarding third parties,
for death, personal
insurance should include cover
injury and damage to property caused by accidents.

for death and personal

(20)

(21)

for monitoring the

the
Procedures
minimum insurance requirements should be transparent
and non-discriminatory and should not impede the free
movement of goods, persons, services and capital.

application of

The measures necessary for the implementation of this
Regulation should be adopted in accordance with
Council Decision 1999/468/EC of 28 June 1999 laying
down the procedures for the exercise of implementing
powers conferred on the Commission (1).

This Regulation should not be interpreted as requiring
double insurance. As far as the contracting carrier and
the actual carrier within the meaning of Article 39 of
the Montreal Convention can be held liable for the same
damage, Member States may establish specific measures
to avoid double insurance.

(22) Where further rules are required to establish adequate
insurance covering aviation-specific liability on points
which are not covered by this Regulation, the Member
States should have the possibility to introduce such
rules.

(1) OJ L 184, 17.7.1999, p. 23.

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(23) Arrangements for greater cooperation over the use of
Gibraltar airport were agreed in London on 2 December
1987 by the Kingdom of Spain and the United Kingdom
in a joint declaration by the Ministers of Foreign Affairs
of the two countries. Such arrangements have yet to
enter into operation.

(24)

Since the objective of
this Regulation, namely the
introduction of minimum insurance requirements which
can contribute to the objectives of the internal aviation
market by reducing distortions of competition, cannot
be sufficiently achieved by the Member States and can
therefore be better achieved at Community level, the
Community may adopt measures,
in accordance with
the principle of subsidiarity as set out in Article 5 of
In accordance with the principle of
the Treaty.
proportionality,
this
Regulation does not go beyond what is necessary in
order to achieve that objective,

in that Article,

set out

as

HAVE ADOPTED THIS REGULATION:

Article 1

Objective

1.
The objective of this Regulation is to establish minimum
insurance requirements for air carriers and aircraft operators in
respect of passengers, baggage, cargo and third parties.

In respect of

2.
insurance
requirements are those set out in Regulation (EEC) No 2407/92
and in the national laws of the Member States.

carriage of mail,

the

the

Article 2

Scope

This Regulation shall apply to all air carriers and to all
the

1.
aircraft operators flying within,
territory of a Member State to which the Treaty applies.

into, out of, or over

2.

This Regulation shall not apply to:

(a) State aircraft as

referred to in Article 3(b) of

Convention on International Civil Aviation,
Chicago on 7 December 1944;

the
signed at

(b) model aircraft with an MTOM of less than 20 kg;

(c)

foot-launched
paragliders and hang gliders);

flying machines

(including

powered

(d) captive balloons;

(e) kites;

(f) parachutes (including parascending parachutes);

(g) aircraft, including gliders, with a MTOM of less than 500

kg, and microlights, which:

— are used for non-commercial purposes, or

— are used for local flight instruction which does not

entail the crossing of international borders,

in so far as the insurance obligations under this Regulation
relating to the risks of war and terrorism are concerned.

The application of

this Regulation to the airport of
3.
Gibraltar
to the
is understood to be without prejudice
respective legal positions of the Kingdom of Spain and the
United Kingdom with regard to the dispute over sovereignty
over the territory in which the airport is situated.

Application of this Regulation to Gibraltar airport shall
4.
be suspended until
the arrangements included in the Joint
Declaration made by the Foreign Ministers of the Kingdom of
Spain and the United Kingdom on 2 December 1987 enter
into operation. The Governments of Spain and the United
Kingdom will inform the Council of such date of entry into
operation.

Article 3

Definitions

For the purposes of this Regulation:

(a)

‘air carrier' means an air transport undertaking with a
valid operating licence;

(b)

‘Community air carrier' means an air carrier with a valid
operating licence granted by a Member State in accordance
with Regulation (EEC) No 2407/92;

(c)

‘aircraft operator' means the person or entity, not being an
air carrier, who has continual effective disposal of the use
or operation of the aircraft; the natural or legal person in
whose name the aircraft is registered shall be presumed to
be the operator, unless that person can prove that another
person is the operator;

(d)

‘flight' means:

— with regard to passengers and unchecked baggage, the
the passengers by aircraft

period of
including their boarding and disembarkation,

transport of

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— with regard to cargo and checked baggage, the period
of transport of baggage and cargo from the moment
the baggage or cargo is handed to the air carrier until
the moment of delivery to the entitled recipient,

— with regard to third parties, the use of an aircraft from
the moment when power is applied to its engines for
the purpose of
the
taxiing or actual
moment when it is on the surface and its engines have
come to a complete stop; additionally, it shall mean the
moving of an aircraft by towing and push-back
vehicles or by powers which are typical for the drive
and the lift of aircraft, particularly air streams;

take-off until

(e)

‘SDR' means a Special Drawing Right as defined by the
International Monetary Fund;

(f)

‘MTOM' means the Maximum Take Off Mass, which
corresponds to a certified amount specific to all aircraft
types, as stated in the certificate of airworthiness of the
aircraft;

This Regulation is without prejudice to the rules on

3.
liability as arising from:

— international Conventions to which the Member States

and/or the Community are parties,

— Community law, and

— national law of the Member States.

Article 5

Compliance

(g)

‘passenger' means any person who is on a flight with the
consent of the air carrier or the aircraft operator, excluding
on-duty members of both the flight crew and the cabin
crew;

1.
Air carriers and, when so required, aircraft operators, as
referred to in Article 2, shall demonstrate compliance with the
insurance requirements set out in this Regulation by providing
the competent authorities of the Member State concerned with
a deposit of an insurance certificate or other evidence of valid
insurance.

(h) ‘third party' means any legal or natural person, excluding
passengers and on-duty members of both the flight crew
and the cabin crew;

(i)

‘commercial
operation'
remuneration and/or hire.

means

an

operation

for

Article 4

Principles of insurance

aviation-specific

1.
Air carriers and aircraft operators referred to in Article 2
shall be insured in accordance with this Regulation as regards
their
in respect of passengers,
baggage, cargo and third parties. The insured risks shall
terrorism, hijacking, acts of sabotage,
include acts of war,
unlawful seizure of aircraft and civil commotion.

liability

2.
For the purpose of this Article ‘Member State concerned'
shall mean the Member State which has granted the operating
licence to the Community air carrier or the Member State
where the aircraft of the aircraft operator is registered. For
non-Community air carriers and aircraft operators using
aircraft
‘Member State
concerned' shall mean the Member State to or from which the
flights are operated.

registered outside the Community,

3.
By way of exception from paragraph 1, Member States
overflown may require that air carriers and aircraft operators
referred to in Article 2 produce evidence of valid insurance in
accordance with this Regulation.

4. With regard to Community air carriers and aircraft
the
operators using aircraft
deposit of evidence of insurance in the Member State referred
to in paragraph 2 is sufficient for all Member States, without
prejudice to the application of Article 8(6).

registered in the Community,

Air carriers and aircraft operators shall ensure that
2.
insurance cover exists for each and every flight, regardless of
whether
through
ownership or any form of lease agreement, or through joint or
franchise operations, code-sharing or any other agreement of
the same nature.

the aircraft operated is at

their disposal

In exceptional cases of

5.
the
Commission may determine, in accordance with the procedure
referred to in Article 9(2), the appropriate measures for the
application of paragraph 1.

insurance-market

failure,

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Article 6

Insurance in respect of liability for passengers, baggage
and cargo

liability in respect of passengers,
cover

the minimum
1.
For
insurance
shall be 250 000 SDRs per passenger.
However, in respect of non-commercial operations by aircraft
with a MTOM of 2 700 kg or less, Member States may set a
lower level of minimum insurance cover, provided that such
cover is at least 100 000 SDRs per passenger.

For
2.
insurance cover
commercial operations.

liability in respect of baggage,

shall be 1 000 SDRs per passenger

the minimum
in

If at any time insurance cover for damage to third parties due
to risks of war or terrorism is not available to any air carrier
or aircraft operator on a per-accident basis, such air carrier or
aircraft operator may satisfy its obligation to insure such risks
by insuring on an aggregate basis. The Commission shall
closely monitor the application of this provision in order to
ensure that such aggregate is at least equivalent to the relevant
amount set out in the table.

2.
The values referred to in this Article may be amended, as
appropriate, where amendments in the relevant international
treaties indicate the necessity thereof, in accordance with the
procedure referred to in Article 9(2).

For liability in respect of cargo, the minimum insurance
3.
cover shall be 17 SDRs per kilogram in commercial operations.

Article 8

Paragraphs 1, 2 and 3 shall not apply with respect to
4.
flights over the territory of the Member States carried out by
non-Community air carriers and by aircraft operators using
aircraft
registered outside the Community which do not
involve a landing on, or take-off from, such territory.

5.
The values referred to in this Article may be amended, as
appropriate, where amendments in the relevant international
treaties indicate the necessity thereof, in accordance with the
procedure referred to in Article 9(2).

Article 7

Insurance in respect of liability for third parties

In respect of

1.
the minimum
insurance cover per accident, for each and every aircraft, shall
be:

liability for third parties,

Category

1

2

3

4

5

6

7

8

9

10

MTOM
(kg)

< 500

< 1 000

< 2 700

< 6 000

< 12 000

< 25 000

< 50 000

< 200 000

< 500 000

¯ 500 000

Minimum insurance
(million SDRs)

0,75

1,5

3

7

18

80

150

300

500

700

Enforcement and sanctions

1. Member States shall ensure that air carriers and aircraft
operators referred to in Article 2 comply with this Regulation.

For the purposes of paragraph 1 and without prejudice
2.
to paragraph 7, with respect to overflights by non-Community
air carriers or aircraft registered outside the Community which
do not involve a landing on or take-off from any Member
State, as well as with respect to stops in Member States by
the Member State
such aircraft
concerned may request evidence of compliance with the
insurance requirements laid down in this Regulation.

for non-traffic purposes,

3. Where necessary, Member States may request additional
evidence from the air carrier,
the aircraft operator or the
insurer concerned.

Sanctions for infringement of this Regulation shall be

4.
effective, proportional and dissuasive.

5. With regard to Community air carriers, these sanctions
may include the withdrawal of the operating licence, subject to
and in accordance with the relevant provisions of Community
law.

6. With regard to non-Community air carriers and to
aircraft operators
the
aircraft
Community, the sanctions may include refusal of the right to
land on the territory of a Member State.

registered

outside

using

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7. Where Member States are not satisfied that the conditions
of this Regulation are met, they shall not allow an aircraft to
take off, before the air carrier or aircraft operator concerned
has produced evidence of adequate
in
accordance with this Regulation.

insurance

cover

Article 9

Committee procedure

1.
The Commission shall be assisted by the Committee set
up by Article 11 of Council Regulation (EEC) No 2408/92 of
23 July 1992 on access
to
intra-Community air routes (1).

for Community air carriers

2. Where reference is made to this paragraph, Articles 5
and 7 of Decision 1999/468/EC shall apply, having regard to
the provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC
shall be set at three months.

3.

The Committee shall adopt its rules of procedure.

The Committee may furthermore be consulted by the
4.
Commission on any other matter concerning the application of
this Regulation.

Article 10

Report and cooperation

The Commission shall submit a report to the European
1.
Parliament and the Council on the operation of this Regulation
by 30 April 2008.

Upon request, Member States shall submit information

2.
on the application of this Regulation to the Commission.

Article 11

Entry into force

This Regulation shall enter into force twelve months following
the date of its publication in the Official Journal of the European
Union.

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Strasbourg, 21 April 2004.

For the European Parliament

The President

P. COX

For the Council

The President

D. ROCHE

(1) OJ L 240, 24.8.1992, p. 8. Regulation as

last amended by
Regulation (EC) No 1882/2003 of the European Parliament and of
the Council (OJ L 284, 31.10.2003, p. 1).