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UPSC Prelims 2026 GS Paper 1, question 96

Topic: Economy

Q96

Which of the following statements about insurance in aviation sector is/are correct ?

  1. ‘Aviation Hull Insurance’ covers the physical aircraft, including the body, engine, and on-board equipment.

  2. Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.

Select the answer using the code given below :

  1. (a) 1 only
  2. (b) 2 only
  3. (c) Both 1 and 2Correct answer
  4. (d) Neither 1 nor 2

Solution.

Answer: (c) Both 1 and 2

  1. Statement 1 is correct: Aviation Hull Insurance provides property damage coverage for the physical aircraft itself, including the airframe, engines, and onboard instruments.
  2. Statement 2 is correct: under the Montreal Convention, 1999 (to which over 130 states including India are parties), airlines bear strict first-tier no-fault liability (up to the statutory SDR threshold) to compensate the family of a deceased passenger without requiring proof of carrier negligence.