Are Your Aircraft Parts Insured While in Transit?

Not necessarily. Insurance that protects aircraft parts and inventory at your premises may not provide the same protection once those parts leave the location.

For FBOs, MROs, aviation parts suppliers and other aviation businesses, that distinction can matter when expensive components are routinely being shipped between facilities, customers, repair vendors and overhaul shops.

Engines, avionics, propellers, landing gear, rotables and other aircraft components can represent substantial value. A loss in transit can therefore create a significant financial exposure even when the underlying shipment seems routine.

The question is not simply whether your business has property insurance.

The better question is:

What happens to the coverage when the part starts moving?

What does “parts in transit” mean?

Parts in transit are aircraft parts, components, equipment or other business property being transported from one location to another.

For an aviation business, that might include property being:

Shipped to a customer
Sent to an overhaul or repair facility
Returned to a manufacturer
Transferred between business locations
Delivered by a common carrier
Transported in a company-owned vehicle
Temporarily held at another location during the shipping process
Returned after maintenance, inspection or repair

The exposure can involve property your company owns as well as property belonging to someone else, depending on the circumstances.

That is why identifying whose property is moving, who is responsible for it and what policy applies during transit is an important part of an aviation insurance review.

Does commercial property insurance cover parts in transit?

It may, but a business should not assume that property covered at its premises has identical protection while in transit.

Commercial property insurance is generally designed around property at insured locations. Coverage for property that moves between locations may be limited, subject to separate limits or addressed through another form of coverage.

Depending on the insurance program, protection for property in transit may be addressed through inland marine, transit coverage, a property extension or another specialized form.

The specific answer depends on the policy.

For an FBO or MRO, this means the property limit shown on the declarations page does not by itself answer whether a $100,000, $500,000 or higher-value aircraft component is adequately insured while being shipped.

What kinds of aircraft parts may need transit coverage?

Any aircraft component with meaningful value can create a transit exposure.

Examples may include:

Engines and engine components
Propellers
Avionics
Landing gear
APUs
Flight controls
Rotable components
Instruments
Specialized tooling
Replacement parts
Customer-owned components sent out for repair
Inventory transferred between facilities

The value of a single shipment can sometimes be substantially higher than the value of an average shipment.

That makes it important to consider the largest realistic shipment, not simply the typical one.

Does the shipping company's insurance cover aircraft parts in transit?

Do not assume that it does.

Using a freight company, parcel service or other carrier does not necessarily mean your aviation business will be reimbursed for the full value of a damaged or lost component.

The carrier's responsibility may depend on its contract, declared value, shipping terms, limitations of liability and the circumstances of the loss.

For a low-value shipment, that difference may be manageable.

For a high-value aircraft component, it can become a significant uninsured exposure.

Before relying on the carrier, determine:

What responsibility has the carrier accepted?
Is there a limitation on that responsibility?
What value has been declared for the shipment?
Does your own insurance respond if the carrier does not pay the full loss?

The goal is to understand the complete chain of protection before a loss occurs.

Does parts in transit insurance cover customer-owned aircraft parts?

It can, depending on how the policy is written.

This question is particularly important for MROs and other aviation businesses that regularly take possession of customer-owned components.

Consider an MRO that removes a customer's component and ships it to a third-party facility for overhaul.

Several questions immediately arise:

Who is responsible for the component while it is being shipped?
Does the MRO's policy cover property belonging to others?
Does coverage continue while the component is away from the MRO's premises?
What limit applies?
Does the contract with the customer transfer responsibility for the loss?
Does the repair or overhaul vendor provide any protection once it receives the part?

Those questions cannot be answered simply by confirming that the MRO has commercial property insurance.

The contracts and insurance policies need to be considered together.

How much parts in transit coverage does an aviation business need?

There is no single appropriate limit for every FBO, MRO or aviation parts business.

A useful starting point is to determine the maximum realistic value that could be in transit at one time.

Consider:

The highest-value individual component you ship
Whether multiple parts may be included in one shipment
The number of shipments that may be in transit simultaneously
Customer-owned property
Engines or major assemblies sent for overhaul
Seasonal or operational peaks in shipping activity
Transfers between locations
Temporary storage during transportation

A limit based on an average shipment may be inadequate if the business occasionally sends much more valuable property.

The exposure should reflect how the business actually operates today, not what it was shipping several years ago when the policy was originally structured.

What happens if an aircraft part is damaged while being shipped?

The answer depends on the circumstances of the loss and the insurance program.

A review may need to determine:

Who owned the part
Who had responsibility for it at the time
How it was being transported
Whether a carrier was involved
What the shipping agreement required
Whether the part was in transit or temporary storage
Which policy or coverage extension applies
What limit and deductible apply
Whether any exclusions affect the loss

This is another reason aviation businesses should think in terms of an insurance program, rather than treating property, liability and transit exposures as unrelated policies.

When should an FBO or MRO review its parts in transit exposure?

Review the exposure when the operation changes.

That may include when your business:

Begins handling higher-value aircraft
Adds new maintenance capabilities
Ships more engines or major components
Adds another location
Takes on a fleet customer
Begins sending more work to outside repair facilities
Increases aircraft parts inventory
Changes freight or logistics providers
Assumes new contractual responsibility for customer property

A business can grow into a transit exposure without anyone intentionally changing its insurance.

The shipping process becomes routine.

The value being shipped increases.

The insurance limit stays the same.

That is the type of mismatch an insurance review should identify before a large loss exposes it.

Don't evaluate aircraft parts only when they are sitting on the shelf

An aviation parts inventory can move through several different environments:

At your facility → in transit → at a vendor → in transit again → back at your facility or delivered to the customer.

The insurance question should follow the property through that entire journey.

For FBOs, MROs and aviation businesses handling valuable components, the objective is to determine whether the insurance program protects the property where it actually goes—not simply where it is normally stored.

If your company routinely ships engines, avionics, aircraft components or customer-owned parts, Aeris Insurance Solutions can review your parts-in-transit exposure as part of a broader Coverage Risk Review.

Coverage availability, definitions, limits and exclusions vary by insurer and policy. Review the actual policy and contractual requirements to determine how coverage applies to a specific operation.

Parts in Transit Insurance for FBOs & MROs