Overview of the current situation
Public reporting indicates that active and rapidly evolving military operations are now underway involving the United States, Israel, and Iran. Following the initiation of a U.S. and Israeli air campaign targeting sites within Iran, Iranian forces responded with significant retaliatory strikes, launching missiles and drones into multiple countries across the Middle East. At this time, confirmed targets include Israel, the United Arab Emirates (including Abu Dhabi and Dubai), Saudi Arabia, Qatar, Bahrain, Kuwait, and Oman. Reports indicate that additional countries may be affected as the situation continues to develop. The Iranian strikes have reportedly impacted commercial and residential areas, airports, and other targets. The Iranian Republican Guard has also threatened to close the Strait of Hormuz and has seemingly deliberately targeted merchant vessels transiting through this vital shipping channel to the rest of the world; as a practical matter, most vessels are not now entering the Strait for fear of being hit.1
This conflict has resulted in the immediate closure of all altitudes of airspace across multiple affected nations. Given attacks on airports in the region, aircraft – whether on the ground or in transit – face substantial risk of damage or destruction. Other assets such as catering operations, fuel service operations, and maintenance facilities, as well as airports and civilian runways are also at risk. The situation remains fluid, and those affected should anticipate further disruptions and potential escalation in the coming days. Currently, there is no viable estimate as to when hostilities will cease.
Immediate considerations for the aviation industry
Given the severity and unpredictability of the current conflict, clients with aviation assets in or near the affected regions should consider immediate action to protect their assets. Aviation clients in particular are advised to take note of the following additional insurance issues.
Provide notice to insurers. Clients with aircraft, engines, or other aviation assets located in, operating in, or transiting through the affected areas should consider promptly notifying their insurers of the potential exposure. Early notice is critical to preserving coverage rights under most aviation insurance policies. Even the mere existence of an ongoing conflict and the closure of airspace may trigger immediate notice obligations or create circumstances that could later give rise to a claim.
Review insurance policies carefully. Clients may own aircraft outright or operate aircraft under leases. Clients should consider undertaking a comprehensive review of their insurance policies, including all-risk and spares hull, war and allied perils coverage, and any political risk or political violence insurance they may have purchased or under which they may be named as additional insureds on leases at issue. Additionally, clients should evaluate any rights to reinsurance policies under cut-through clauses. Aircraft lessors and airlines should also consult their lease agreements to understand their rights and obligations under the circumstances. Clients should consider engaging their insurance brokers and coverage counsel immediately to discuss coverage questions and confirm the territorial scope, attachment points, sublimits, potentially applicable exclusions, and any recent endorsements or notices affecting coverage available under existing policies.
Consider relocation of aircraft. Where operationally and legally feasible, clients should evaluate whether aircraft can be repositioned, evacuated, or otherwise removed from high-risk airspace or airports to reduce the risk of loss. This may involve close coordination with aircraft lessees/airlines; aircraft lessors; insurers; local authorities; air traffic control; maintenance, repair, and overhaul; and other ground handlers to identify safe transit routes and destination airports. Furthermore, it would be prudent to review leases on affected aircraft and engines to understand the parties’ rights and obligations under such circumstances.
Anticipate and review carrier notices. Based on prior experience following Russia’s invasion of Ukraine in 2022 and elsewhere, we expect insurers and reinsurers will begin issuing immediate notices of cancellation or modification of coverage for the affected territories effective as early as within seven days of the notice. Clients should continuously monitor incoming insurer correspondence closely and review any such notices promptly upon receipt. These notices often impose strict deadlines for action, and failure to respond appropriately may result in a lapse of critical coverage.
Consider notifying political risk carriers. To the extent clients have purchased political risk insurance, we recommend considering whether to provide notice to those carriers as well. Following Russia’s invasion of Ukraine, insurers asserted that political risk insurance, as opposed to all-risk hull or war risk coverage, should respond to the loss of leased Western aircraft. In light of those arguments, clients should consider whether notification to political risk insurers should be given as well. A broad notice strategy helps to preserve optionality and reduces the risk of a carrier later denying coverage based on alleged late notice.
The current conflict presents significant and immediate risks to aviation assets and operations in the Middle East. We strongly encourage all affected enterprises to act swiftly to assess their exposure, engage with insurers, brokers, and coverage counsel, and take all reasonable steps to mitigate potential losses.
The Reed Smith Insurance Recovery Group and its aviation insurance team are available to lend policyholders our knowledge and experience in policy review, notice preparation, and strategic guidance as this situation continues to unfold. Please do not hesitate to contact us if you have questions or require assistance
Note: This alert is based in part on publicly available information as of March 2, 2026, and conditions may change rapidly.
1. The implications of this – in terms of coverage and otherwise – will be addressed in a separate client alert by our Transportation Industry Group.
Client Alert 2026-45