California Property & Casualty Broker-AgentMiscellaneousHard
A commercial air cargo carrier has an aviation liability policy. A shipment of electronics is damaged during transit due to a mechanical failure of the aircraft, leading to a financial loss for the cargo owner. Under which part of the aviation liability policy would the carrier's legal responsibility for this damaged cargo typically be covered?
- AThird-Party Liability (Bodily Injury/Property Damage)
- BCargo Legal Liability
- CPassenger Liability
- DPersonal Accident Coverage
Show answer & explanationAnswer & explanation
Correct answer: B. Cargo Legal Liability
Cargo Legal Liability specifically covers the legal liability of the air carrier for loss or damage to cargo in its care, custody, or control. This is distinct from passenger liability or general third-party liability for bodily injury or property damage to non-passengers/non-cargo.
Why the other options are wrong
- A. Third-Party Liability covers bodily injury or property damage to individuals or property not being carried on the aircraft (e.g., people on the ground).
- C. Passenger Liability covers bodily injury or death to passengers.
- D. Personal Accident Coverage provides benefits for injury or death to individuals, typically pilots or crew, regardless of liability.
Aviation Cargo Legal Liability
A specific coverage within an aviation liability policy that protects an air carrier against legal liability for loss or damage to cargo entrusted to them for transport.
- Covers the carrier's legal responsibility, not the cargo owner's direct loss.
- Subject to limits, exclusions, and conventions (e.g., Montreal Convention).
- Distinct from passenger liability or hull coverage.
Memory trick: Aviation liability covers Passengers, Third-parties, and precious Cargo.