This book explores the central problems underlying the insurance of catastrophic risks such as aviation war and terrorism risks by conventional means. It also analyzes some of the most prominent concepts and ideas proposed and/or implemented in the aftermath of September 11, 2001, to determine whether and to what extent they avoid the pitfalls underlying the inability of conventional insurance markets to provide coverage for aviation war and terrorism risks in a sustainable fashion. This book fills a gap in the existing literature on the insurance of catastrophic risks by identifying the economic and behavioural causes of market failure/disruptions in the period immediately following the occurrence of a catastrophic event. It is primarily directed at insurance and risk managers in the air transport industry who desire to deepen their understanding of how the concept of insurance operates in relation to catastrophic risks in the air transport sector. It is also a useful tool for policymakers, lawmakers and government officials who have to deal with aviation insurance matters on a daily basis.Although the book deals with a rather specialized subject matter, it is written in a format that facilitates easy appreciation and understanding. It may therefore be used as a primary reference source in the training of airline risk and insurance managers and also as recommended reading for those generally interested in matters relevant to aviation insurance and insurance of catastrophic risks.