Bermuda's insurers are not expected to be impacted by any big insurance claims resulting from the major disruption to European air travel caused by the Icelandic volcanic ash cloud, according to industry experts.

Dr.<\p>Robert Hartwig, president of the Insurance Information Institute, said fallout from the event would have little to no effect on the global and the Island's insurance market, with the exception of some travel insurers due to their being no damage to the aircraft and no appreciable damage caused by the volcano itself.

However insurers said that airlines face huge losses in revenue as a result of the ash cloud that has prevented aircraft from flying anywhere in northern Europe due to having no insurance coverage for such an event.

Dr. Hartwig said that business interruption was only triggered when there was loss or damage to the insured property from a covered peril and since it was not damaged there was no coverage available.

He added that some business may have insured their perishable goods and, while there had been some loss of perishables, the losses were not major and it was unlikely that many of these firms carried such insurance cover.

As far as passengers were concerned, he said that whether they would be compensated depended entirely on their policy, and while it would be an expensive event for some travel insurers, it was an extremely small segment of the greater property/casualty insurance sector.

Meanwhile the International Air Transport Association (IATA)<\p>has criticised European governments' lack of risk management in handling airspace restrictions due to volcanic ash and called for the reopening airports.

"We are far enough into this crisis to express our dissatisfaction on how governments have managed it-with no risk assessment, no consultation, no co-ordination and no leadership," said Giovanni Bisignani, IATA's Geneva-based director general and CEO, in a statement and press briefing in Paris on Monday. IATA says it represents 230 airlines that comprise 93 percent of scheduled international air traffic.

Mr. Bisignani said European governments managed the risk poorly and unnecessarily delayed resumption of flights.

"This crisis is costing airlines at least $200 million a day in lost revenues and the European economy is suffering billions of dollars in lost business," Mr. Bisignani said. "In the face of such dire economic consequences, it is incredible that Europe's transport ministers have taken five days to organise a teleconference" to address the crisis, he said. "Risk assessments should be able to help us reopen certain corridors, if not entire airspaces."

Mr. Bisignani also hit out at Europe's methodology of closing airspace based on the modelling of the ash cloud.

"This is not an acceptable system, particularly when the consequences for safety and the economy are so large," he said.

"We have seen volcanic activity in many parts of the world, but rarely has it resulted in airspace closures-and never at this scale. When Mount St. Helens erupted in the US in 1980, we did not see large-scale disruptions, because the decisions to open or close airspace were risk-managed with no compromise on safety. The scale of airspace closures currently seen in Europe is unprecedented."

According to AIR, airlines generally do not have insurance cover to compensate for this type of disruption, which falls under 'act of God' exclusion clauses.

Planes which have been grounded are not covered but if they had been damaged by the huge ash cloud which is being blown south from Iceland they would be covered under aviation insurance typically covers physical damage to planes, experts said.

"A plane crash as a consequence of a flight through ash would be 100 percent insured," said Christoph Groffy, a spokesman for Talanx AG's unit HDI-Gerling, one of the largest insurers of German aviation companies such as airlines and airports.

"It's an obligatory insurance but unlikely to happen due to the closure of airports.

"Business interruption policies are expensive and generally, airlines or airports haven't bought them, so the full risk lies with them."

he British Insurance Brokers' Association, an industry body which covers 1,700 brokers and intermediaries in the UK, said that its policies, underwritten by Tokio Marine Europe Insurance Ltd., cover travellers for delays and said that claims caused by the volcanic ash will be covered.

"Not all insurance policies are the same and travellers are urged to contact their insurance provider to clarify their specific policy coverage as not all insurers will necessarily cover this," said Steve Foulsham, technical services manager of the British Insurance Brokers' Association.

AIR<\p>said that while some of the ash had fallen to the earth's surface, property and agricultural damage was not expected to be a concern and the impact on tourism was also anticipated to be limited as travellers continue to buy food and shelter wherever they are stranded.

n addition to the costs to the airline industry, the major source of loss may be to economic output from people unable to return to work, estimated at around $500 million a day by an economist from the Royal Bank of Scotland. Unless the restrictions remain in place for a long time, however, the effect on economic growth was expected to be minimal.

British Airways plc. (BA) will see the cost of grounding its entire 245-plane fleet for the first time in its history run to several millions of pounds. BA legal documents related to the recent strike held by the employees' union show that the company estimates the average cost of taking a single long-haul aircraft out of service for a day was about £174,000 while the cost of grounding the entire long-haul fleet for a day is roughly £13 million. BA was not immediately able to comment on its insurance arrangements.

The volcano under Iceland's Eyjafjallajokull glacier erupted last week, spewing clouds up to 30,000 feet into the air and the threat of the ash plume will continue through to Sunday, according to AccuWeather.com meteorologists.

Thousands of flights have been cancelled from and to Europe and hundreds of thousands of passengers have been unable to fly into or out of the region as airports shut across northern Europe.