Research Projects

Insuring Airports as a Means to Mitigate Risk

Develop guidance for airports on contracting and managing effective airport insurance services. The guidance should include practices airports can adopt to include insurance as a risk mitigation approach within an SMS.

Background (Describe the current situation or problem in the industry, and how your idea would address it.)

All airports need to be insured. Carrying insurance in its numerous forms is arguably the most common risk mitigation approach for airports. Insurance transfers the risk to another organization and is aimed at keeping the airport fiscally sound following the occurrence all manner of unintended and undesirable event outcomes. Given that insurance is a requirement for airports, surveys of airport managers uncovered the need for guidance to assist airport leadership in determining the level and appropriate type of insurance, as well as guidance on how to integrate the underwriting with contracts, lease holders, airport based businesses, and other airport activities. The guidance developed through research on this subject should address the airport type, size and complexity of operations.
As more airports operate under a safety management system (SMS), airport insurance will serve as a risk mitigation strategy for a number of high risk safety hazards. The research should view insurance in this way, as well as in the traditional ways contracting for insurance is understood, and provide recommendations on how the airport can partner with the underwriter to use SMS processes as a means to reduce insurance premiums.

Objective (What is the desired product or result that will help the airport industry?)

A a synthesis of best practices for airports of differing sizes and complexity on contracting and managing effective airport insurance services. The synthesis should include practices airports can adopt to include insurance as a risk mitigation approach within an SMS and recommendation on how the airport can partner with the underwriter to use SMS processes as a means to reduce insurance premiums.

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Idea No. 363