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Canada to aid airlines, airports with insurance

MONTREAL (Reuters) -- Canada said on Saturday that it would provide an indemnity for "third-party war and terrorism" liabilities for the country's essential aviation service operators, including airports and airlines.

The move would ensure that aviation services could be maintained uninterrupted, Canadian Transport Minister David Collenette said in a statement.

It follows similar action taken in Europe as governments step in to fill the void left by international insurers that decided following the September 11 attacks on the United States that they would no longer provide war-risk liability.

"Without this coverage, many key aviation services would be unable to continue operation," Collenette said.

"The Government of Canada has decided that, for a limited period, it will support the industry where commercial coverage will no longer be available."

Transport Canada officials told Reuters it was too early to provide a dollar amount for the indemnity assistance.

The offer will apply to Canadian air carriers, including Air Canada, the country's largest and No. 10 in the world, airports and NAV Canada, which provides air navigation services.

Others such as the Air Transport Security Corp. and essential service providers at airports, including ground handlers and refuellers, are also available for the coverage, which will last up to 90 days.

The indemnity will apply only to those operators that already carry such coverage, only to the limits of their existing terms and conditions and the portion of existing coverage that will not be offered in commercially available insurance policies.

Collenette said the measure would give those affected time to reassess the global insurance market situation and develop more long-term solutions.