A turbine engine suffers foreign object damage (FOD) and is withdrawn from service for inspection and necessary repairs. Upon opening the engine, it is discovered that the turbine blades are worn and cracked due to excessively high temperatures. As a matter of good practice, the engineer concerned condemns the worn and cracked turbine blades and replaces them… at a cost of $20,000. The original FOD is found to have caused minimal damage and the engine is closed up… leaving the owner with a substantial uninsured loss. The argument is put forward that were it not for the FOD, the turbine blades would have, in all probability, continued to provide service until the next scheduled overhaul date, at which point they would have been replaced. Therefore, it is argued, the Owner has suffered an additional loss by becoming obliged to accelerate the replacement of those blades and, therefore, this is something to which the insurance policy should respond. Regrettably, the answer is somewhat different. The policy will respond to those costs that would have been incurred in inspecting and repairing the accident damage but NOT to any other work, whether due to SBs/ADs or wear and tear, that is carried out at the same time. Occasionally, the Owner will elect to have other work (such as a hot section inspection) carried out whilst the engine is opened for the purpose of inspecting or repairing the accident damage. Whilst this is subject to agreement between the Owner and the Insurer, it would be most unusual for the insurer to refuse to co-operate. However, depending upon the circumstances, the Insurer may request some form of contribution towards the cost of closing/refitting the engine. Again, proper provision for replacement or overhaul of engine components, made consistently throughout the life of the engine, will invariably avoid any unpleasant surprises in the event of accidental damage arising.

Uninsured Losses Arising from Engine Repairs