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Publication of EU Contract Continuation Clause

Posted on: 19 June 2017

The Aviation Insurance Clauses Group (AICG) has published a new model EU contract continuation clause (reference AVN 121).
The AICG was established in June 2005 by the International Underwriting Association of London and the Lloyd’s Market Association.  It publishes non-binding standard wordings and clauses for use in aviation insurance policies.  Clients are consulted on proposed clauses and can propose variant clauses themselves.

Chris Jones, Director of Legal and Market Services at the International Underwriting Association, said: “The aim of the new clause is to provide additional certainty for clients as the UK leaves the European Union. Without any new trade agreement or business continuity arrangement, it is possible that some insurers may not be in a position to continue providing cover or pay claims on cross-border contracts.

“Though it is still relatively early in the negotiation process, multi-year policies incepting now may potentially extend beyond the deadline for Brexit to take place. An effective policy response, therefore, seems a prudent course of action.

“The basic principle underpinning the new clause is simple: to allow for a transfer of an insurer or reinsurer’s participation in the contract. However, this is subject to specific criteria, applying only where cover cannot be provided because of the UK leaving the EU. The clause cannot apply in any other circumstances.

“It has, of course, been drafted with aviation policies in mind, but its wording is relatively generic and could, therefore, be adapted for use in other classes of business if required.”

Further information about the AICG is available on the group’s website at
A copy of the clause is attached here and also available on the IUA clauses website at

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