Is ash covered by insurance?

iceland-volcano-domijpg-0e4813bb41252a42_large.jpgAviation insurance will typically cover the physical damage to planes, but no plane has been damaged by volcanic ash. Only "business interruption" policies would be in effect, and apparently most airlines and airports don't have those because they are too expensive. From the WSJ:

Airlines and industry experts are still trying to estimate the cost of the travel disruption, but the losses are likely to run into the millions of dollars at a time when carriers are already struggling with reduced demand for air travel due to the economic downturn. British Airways PLC, for example, will see the cost of grounding its entire 245-plane fleet for the first time in its history run to several millions of pounds.

Travelers who took out insurance before April 13th stand a chance of being covered; volcanic eruptions are sometimes included in benefits. But missing a connection for a tour or cruise is iffy: While most policies include weather-related delays, not all plans list natural disasters. Insurance News Net has a rundown. Cruise Critic says that some lines are delaying cruise departures or making special arrangements for folks who get stuck.

Meanwhile, the ash continues to spread. The NYT sums it up in its understated way:

Travel chaos around the world, caused by an erupting volcano in Iceland, deepened on Friday with no sign of reprieve for the weekend.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
 
Mark Lacter, business writer and editor was 59
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