Be Sure To Do Your Insurance Homework Before You Launch!
Recent changes in the relationship between the United States and Cuba have everyone talking about travelling to that island nation before the inevitable “march of progress” changes it forever. Stuart Hope cautions to prepare properly in his latest article for AvBuyer Magazine.
In 2009 the United States began easing sanctions and export control measures against Cuba, eventually resulting in fewer restrictions placed on Cuban-Americans travelling to Cuba, broadening of general licenses for persons already authorized for travel to Cuba, allowing specified trade in support of Cuban people, and removing Cuba as a ‘State Sponsor of Terror.’
In January 2016, the US and Cuba signed an agreement to restore commercial airline service to the island, and US officials have indicated they’ll decided this summer which airlines will be approved.
Cuba is an attractive destination for several reasons: An historic land caught in a virtual time warp, the nation long ruled by Fidel Castro has been off-limits to its nearest neighbor for over a half century. Today Cuba is the hot spot to visit. At least once per week I receive a call from one of my clients asking if their policy territory includes Cuba.
The short answer with almost all the aviation insurance companies is a qualified ‘yes’. However, some insurers apply increased deductibles, may charge an additional premium, and/or decrease the applicable liability limit while you are operating in Cuba. Furthermore, coverage may be provided only if the trip has met all Office of Foreign Assets Control (OFAC) requirements and the passengers have signed the appropriate affidavits confirming they are authorized travelers as defined by current US regulations.
THE OFAC IMPEDIMENT
One of the largest impediments for private/corporate aircraft travel to Cuba has been the US Treasury’s OFAC law. This law applies to US Citizens and US companies and generally prohibits any dealings or financial transactions (either directly or indirectly) with Cuba or any Cuban company.
Here’s the rub. As stated above, most corporation aviation insurance policies include Cuba as an approved territory. However, if an accident occurred while on Cuban soil (let’s say a gear collapse on landing), you were not allowed nor was your insurance company allowed to engage in any transaction monetary or otherwise with a Cuban company to repair your aircraft, leaving you, the owner, to fend for yourself – that is until now.
If you comply with the new “rules” for air operations to Cuba, an AOG event is much easier to support. In general, you must be an authorized traveler as defined below; vet all passengers; meet all FAA and Cuba regulations; and operate from approved US Customs Port of Entry airports for flights to and from Cuba.
READ THE RULES
There are currently twelve categories of authorized travel to Cuba under a general license, including:
- Family visits
- Official business of the US Government
- Journalistic activity
- Professional research/meetings
- Educational activities
- Religious activities
- Public performances
- Support of the Cuban people/Humanitarian projects
- Private foundation activities
- Transmitting of information
- Export/Import, and
- Certain other export transactions
The real deterrent to flying your aircraft to Cuba is not your insurance policy; it’s the governmental rules that must be followed in order for your insurance company to respond and pay for a claim that occurs in Cuba.
A gear-up accident is a fairly routine claim under an aviation insurance policy. However, if the US Government prohibits an insurance company from paying money to a Cuban maintenance facility to repair your aircraft due to OFAC laws, you may find yourself smoking a lot of good Cuban cigars while you extricate yourself from the situation if you didn’t take care of all the details before you launched on your trip.
The easiest detail to tackle is your insurance. Simply call your aviation insurance broker and have its staff confirm to you in writing what coverage and what conditions would apply under your policy for a trip to this mysterious island that everyone is talking about.