Report - Hampshire Police Authority

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					     Hampshire Police Authority

     Finance Committee                              Item: 12

     8 December 2009

     Daedalus Airfield Insurance Cover

     Report of Chief Constable


Contact: Richard Read, Legal Adviser, Force Solicitor’s Office Telephone
extension number 79-1356 (01962 871134)

1.     Summary

1.1. This report provides the Committee with information about the level of
     insurance cover needed for the Constabulary and third party uses of the
     Daedalus airfield.

2.     Recommendations

2.1. It is recommended that the Police Authority require Crown Indemnity
      until such time as Maritime Coastguard Agency agree to any reduced
     level of insurance.

3.     Terminology

3.1 Crown Indemnity is a recognised standard in the insurance industry for
    Military Airfields. It means powered aircraft must carry £7.5 million
    pounds worth of insurance, gliders £3 million pounds worth and micro-
    lights £1.5 million pounds to cover third party claims.

3.2 European Standard is an EU Regulation on Carrier Insurance No. 785 of
    2004 and covers aircraft carriers and aircraft operators which includes
    private commercial flights. It is of a lower value and is based on the
    mass of the aircraft on take-off. Those aircraft that are less than 500
    kgs at take-off would not require any insurance that covers aircraft
    including gliders. Should they exceed 500 kgs but are less than 1000
    kgs then £0.75 million pounds worth of insurance cover is required.
    1000 kgs to 2700 kgs £1.5 million pounds. If passengers and/or cargo
    are carried then different increased values apply.

3.3 Clearly, carrying the European Standard would mean a significantly
    lower cost for those insuring compared to Crown Indemnity, although the
    values are not available.
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4.   Background

4.1. The Police occupy Daedalus airfield pursuant to a Lease dated 13 th
     October 2000 from the Secretary of State for Defence (our direct
     landlord acting through the Maritime Coastguard Agency) (MCA). With
     the consent of the MCA we are holding over pending a new Lease being
     granted.

4.2. The Maritime Coast Guard Agency owns the airfield through their
     Government Department. Hampshire Constabulary hold the airfield
     under a Lease and in those terms and conditions we are obliged to
     follow the requirements of the Maritime Coast Guard Agency , the
     landlord, otherwise the constabulary would be in default of the terms of
     the Lease

4.3. The issue is that Daedalus is no longer recognised as a Military Airfield
     but is Crown owned land so there is an argument to say that Crown
     Indemnity is not required. However, until the Government Lawyer
     agrees to accept the European Standard, the fact that under the terms
     of our Lease of Daedalus the obligation is to insure to the level of Crown
     Indemnity.

4.4. Currently MCA require that any third party using the airfield has Crown
     Indemnity.

4.5. Representatives of the third party users of Daedalus feel that they
     should only insure to European standards. This is a lesser value than
     Crown Indemnity.

4.6. Hampshire Constabulary Force Solicitor’s Office have contacted their
     insurance underwriters indicating that Daedalus is deemed a civil airfield
     but it is owned by the Crown. They advise that Third Party Users must
     have Crown Indemnity otherwise it may compromise our own insurance.

4.7. Currently MCA are seeking advice from the Government Lawyers who
     have yet to advise on whether the Crown indemnity can be waived.
     Presently MCA have not lifted their Crown indemnity requirement.

4.8. The Force Solicitor’s office advises that if the constabulary should
     accept a lesser standard then they may have to pay for the difference
     should MCA demand Crown Indemnity, and the current Police insurance
     would not cover the short fall and it would be for the Authority to find the
     difference, possibly up to £7.5 million pounds from its own funding.

5.   Advice received from Heath Lambert , Insurance Brokers

5.1. Heath Lambert the Police underwriters have provided the following
     advice.


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5.2. As the airfield is owned by the Crown, European insurance would not be
     appropriate to Daedalus or any Crown owned airfields. The Crown
     requires those who use their airfields to indemnify them up to the Crown
     limit.

5.3. Please see Appendix A – Civil Use of MOD Airfields Endorsement.




Section 100D - Local Government Act 1972 -Background Papers

The following documents disclose facts or matters on which this report, or an
important part of it, is based and has been relied upon to a material extent in
the preparation of this report.

N.B. the list excludes:-
1. Published works.
2. Documents which disclose exempt or confidential information as defined in
   the Act.

TITLE                                              LOCATION




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                                                                     APPENDIX A

CIVIL USE OF MOD AIRFIELDS ENDORSEMENT

It is noted that the Insured(s) may wish to use, for civil aircraft purposes,
Ministry of Defence (MOD) airfields and be required to enter into an
agreement with the Crown incorporating certain conditions for the civil (flying)
use of such airfields and to afford an indemnity to the Crown in the Form of
INDEM3.81/Form4a.

The Insurers will indemnify the Insured for all sums which the Insured shall
become legally liable to pay and shall pay to the Crown under such an
agreement as compensatory damages (including costs awarded against the
Insured) in respect of accidental bodily injury (fatal or otherwise) and accidental
damage to property caused by any Aircraft insured under the Policy or by any
person or object falling therefrom.
The limit applicable to this Endorsement is GBP……….. any one Accident and
such limit shall not be in addition to nor in excess of any other limit of liability
provided in the Policy.
Additional Premium …………………………………………………………….:


Unless the Policy otherwise provides, the following exclusions shall apply:-
(a)   Nuclear Risks Exclusion Clause AVN 38B;
(b)   War, Hi-jacking and Other Perils Exclusions Clause (Aviation) AVN 48B;
(c)   Noise and Pollution and Other Perils Exclusion Clause AVN 46B;
(d)   Contracts (Rights of Third Parties) Act 1999 Exclusion Clause AVN 72; and
(e)   Date Recognition Exclusion Clause AVN 2000A.


If Insurers are called upon to provide coverage to the Insured in compliance with
INDEM3.81/Form4a including the defence and legal costs associated therewith
and if by reason of the terms conditions limitations and exclusions of the Policy
such coverage would not have been provided except for this Endorsement then
the Insured will reimburse Insurers for such payments made in providing
coverage under INDEM3.81/Form4a.


Nothing in this Endorsement shall restrict the coverages otherwise provided
under the Policy.


AVN 95 30.4.02



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