The LMA’s Aviation Hull War Forum, subcommittee to the Aviation Committee, has published LMA5703 which is available for use in conjunction with LSW555D.

As underwriters are aware, LSW555D requires Assureds to give immediate notice of “material changes” to underwriters. It further defines a “material change” as “any change in the operation of the Assured which might reasonably be regarded by the Underwriters as increasing their risk in degree or frequency or reducing possibilities of recovery or subrogation”.

LMA5703 reminds parties that if an aircraft has been grounded and is unable to fly due to the closure of airspace or an airport, or the Assured is contemplating flights to such airspace or airport, underwriters could consider it a material change if the Assured proposes that the aircraft should enter such airspace, resume operations or be used to conduct repatriation flights. In such circumstances the notification obligation under LSW555D would be triggered.

LMA5703 does not change any of the terms and conditions of the policy and is available via the Lloyd’s Wordings Repository (LWR).

All LMA model clauses are purely illustrative and are published and distributed for the guidance of Lloyd’s managing agents, brokers and other market participants. All contracting parties are free to agree to different conditions/amend the model clauses as they see fit; the LMA does not protect its intellectual property rights over model clauses. It is for underwriters to decide whether or not any contractual language is acceptable on any given risk.

Ray Koh
Legal Counsel
ray.koh@lmalloyds.com