Tuesday, August 30, 2016

Aircraft Insurance Is A Minefield

Many people who own an aircraft seem to be of the opinion that aircraft insurance is much the same as insuring your car. However, that is very far from the truth. For the uninitiated, aircraft insurance can be a minefield, as is evidenced by the amount of owners who suffer damage which they assume is covered only to find that deep in a sub-section of the policy it is specifically excluded.

Assuming that your name is not John Travolta and you have no need to insure your Boeing 707, you probably own – or your business owns – one or more aircraft for business use. Alternatively, you may just own a small aircraft for personal and pleasure flying. Either way, you need to consider your insurance requirements very carefully, ideally by meeting with a specialist aircraft insurance broker who has been “around the block” a few times and understands the things that you need to look out for.

Here are a few examples of things that many people would consider automatically covered, but may not be.

Your Corporate Umbrella Policy May Not Cover Your Aircraft

Many businessmen believe that they only need a small underlying policy for their aircraft on the basis that their umbrella policy will take care of the rest. Large insurance companies such as Chubb offer umbrella insurance policies to small and medium businesses throughout the US, but in most instances these specifically exclude aircraft and watercraft.

Although the wording of exclusions will vary from one company to another, in most cases aircraft will specifically be excluded.

Can Your Mechanic Fly Your Plane?

You have your aircraft serviced and you expect your mechanic to test fly your aircraft in the same way as your Ferrari mechanic test drives your car when he’s serviced it.

No, this may well be different. Just because the test pilot is your mechanic it does not alter the pilot requirements of your policy. Either your pilot has to meet the “open pilot” requirements of your policy or alternatively he must be a named pilot on your insurance policy.

Employee Coverage

All companies and organizations, from the US federal government downwards, which fly employees on business have a need to protect themselves from lawsuits by employees who have become injured in the course of their work.

Typically, the liability section of your aviation insurance policy will specifically exclude an injury to an employee who suffers the injury during the course of his work. Often there will be a clause which states that the policy does not cover any claim that is covered under a workers compensation, unemployment compensation, or disability benefits law. 

Is Your Pilot Covered?

No matter how good the pilot or his many years of experience with your type of aircraft, it may well be that he does not meet your policy’s minimum pilot requirements. If this is the case, then your policy simply does not cover him. You need to be absolutely certain that any pilot you employ – even for only one flight – is covered by your insurance.

These are only a handful of typical problems that an aircraft owner may encounter. In order to ensure that you do not unknowingly make any mistakes with your aircraft insurance the best advice is to use the services of an aviation insurance broker who will be able to advise you exactly what cover you need and then scour the market to get it for you at the best rate. One such broker is Zanette Aviation Insurance Service Inc whose brokers have between them decades of experience insuring everything that flies – including drones. As with most brokers, their services cost you nothing but could save you from a disaster.