You bought your aircraft and contacted your insurance agent to obtain coverage. That was several years ago. You have been paying your premiums, but the facts have changed. Did you notify your insurance agent of the changes? Do the coverages match your current operating structure?
An insurance review can cover the basics or analyze your coverage. At the basic level you need to ensure the policy accurately describes your aircraft. Did you change the aircraft’s registration number, but forget to notify the insurer?
Follow these steps to get started.
Consider the Coverages:
Hull (physical damage) coverage
Is the current coverage sufficient? Are you over-insured?
Liability coverage
Is the current coverage sufficient? How many passengers are usually on the aircraft? Have the types and number of passengers changed? Should you obtain a quote for additional coverage?
Covered parties
Who are the named insureds and who are the additional insureds? Who owns the aircraft and who operates the aircraft? Do you also want shareholders, directors and officers named as additional insureds? You may have changed the name of the company, but may have forgotten to notify the insurance agent and/or the FAA. If you are now leasing the aircraft, are the lessee’s named as additional insureds, reflecting the fact that they operate the aircraft? Are you now timesharing the aircraft to a company executive
Pilot Clause
Which pilots may fly your aircraft? Do you occasionally use contract pilots? Do they meet the insurance qualifications? Does the policy name the pilots or do you have an open pilot warranty?
Action Steps:
— Identify the current market value of the aircraft as well as any loan restrictions that may affect your hull coverage.
— Identify the owners and operators and any documents (leases, timeshares, loan documents) which may affect who the policy should cover. Obtain copies of the final versions of those documents.
— Contact the relevant individuals in your organization and ask if they anticipate any changes in the ownership or operation of the aircraft (new lessee, change of name of the entity, getting a loan).
— Schedule a meeting with your insurance broker/agent. Take your information, your documents and a list of questions to have a conversation about your aircraft, your policy and what coverages you need.
— The broker should follow-up with you on issues they want to confirm with the underwriter.
— Circulate the information and any potential changes to your insurance coverages to the relevant individuals in your organization. You may need to organize a conference call so that everyone has a date and time by which they should be ready to provide their input.
— Once you have the input, you can notify your insurance broker/agent again to confirm what changes, if any, you want to make to your coverage.
Periodic insurance checkups can help ensure that you receive a check from the insurance company should you need to make a claim in the future.
Michelle M. Wade is a Partner with the aviation law firm of Jetstream Aviation Law, P.A. and counsel clients on the acquisition, financing and operation of corporate jets operated under Part 91 and Part 135 of the US Federal Aviation Regulations. Jetstream Aviation Law can be found at www.JetstreamLaw.com. Michelle Wade (mwade@jetstreamlaw.com)
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.
