Grounding Liability Insurance - What Is A "Grounding"?

No airline wants to ground any part of its fleet unless safety considerations require such action.  Likewise, no aviation product manufacturer wants its product to be implicated in a grounding order.  Nevertheless, once the FAA has issued a mandatory grounding order,  there are important implications for insurance coverage.

Groundings are very likely to result in a loss of revenue.  Although safety is the paramount consideration, it would be natural for the affected parties to seek some type of recourse if a design or manufacturing defect is determined to exist.  To protect against the financial consequences of  such claims, aviation manufacturers can purchase aviation products liability insurance.  For purposes of such insurance, it can make a very significant difference whether a grounding is based on voluntary action or mandated by governmental act.