|
|
Executive Summary
This article by Michelle Wade was first published on Forbes.com and titled Tips When Buying Aviation Insurance For Your New Company Plane
Ask questions to ensure you receive the correct coverage.
Review the Aviation Insurance Policy & Endorsements
Review the insurance to confirm that it covers all of the aircraft’s operations and all of the relevant parties.
Know Who is Covered by the Insurance
The LLC that owns the aircraft may be covered, but does the insurance cover you, the individual who owns the LLC and who leases the plane for personal trips? Ask questions so that your insurance agent can help obtain the coverages needed for all of the aircraft’s operations.
Two Action Items
Two actions you can take to try to obtain the best rate and best insurance coverages for your business aircraft include:
- Start early to research available insurance
- Work with a broker who specializes in aviation insurance
Whether it is an initial purchase or an annual renewal, it is an opportunity to evaluate the aircraft’s operations and ensure that the coverages fit the company’s aircraft operations.
Article – Tips for Buying Aviation Insurance
When buying a private plane for your business, shop for aviation insurance sooner rather than later. Many assume the insurance item on your company’s aircraft acquisition checklist is merely a decision about the amount of coverage you want; however, in some insurance markets, the insurance item needs to move up the checklist because the company may be unable to obtain the same coverages for its business aircraft that were available in prior policies.
Review the company’s aviation insurance policy and endorsements
The company should first review the aircraft insurance coverages and the operations covered by the insurance to confirm that the insurance covers all the aircraft’s operations and all relevant parties. The company should look at the policy and endorsements, not just the insurance certificate, because the certificate may state that it does not amend or alter the coverages afforded by the policy.
Carefully read the policy and endorsements in addition to asking your insurance agent how the coverages and premium of your policy compare with the coverages and premiums of other aviation insurers. The company needs to know how the policy defines terms such as named insured, insured, additional named insured and additional insured. Although these terms sound similar, they may have different coverages under the insurance policy.
The coverage you believe will cover all operations of the aircraft also may not be your primary coverage. If you have other insurance that provides coverage, your aircraft insurance might only provide coverage after other insurance limits are exhausted. Talk with your insurance agent to confirm whether your aviation insurance is the primary coverage.
Know who is covered by the aviation insurance
If your LLC owns or operates the aircraft, confirm whether the individuals who are the members and managers of the LLC are included in the liability insurance coverage. Is your LLC protected, while you, an LLC owner with significant assets, have no liability insurance coverage? If there is an accident and plaintiffs make a claim for damages, plaintiffs could initially sue everyone they can identify.
Any lessees of the aircraft under dry leases should have insurance coverage for the lessee’s operation of the aircraft. Ask in advance if there is an additional fee to add coverage for the lessee’s operation of the aircraft under a dry lease. If the insurance endorsement only insures the lessee with respect to the lessee’s liability because of the named insured’s ownership, maintenance or use of aircraft, this may not mean that the lessee’s operation of the aircraft under its dry lease is covered under the insurance, so the company needs to further address this question with the insurance agent
Be aware of additional requirements for pilots
Some business owners who are pilots are finding that they cannot obtain insurance coverage to fly their own plane because of increased training and pilot experience requirements of insurers. Companies utilizing less-experienced pilots might also discover that the insurer adds additional requirements that make using these pilots more expensive or impractical.
Put all of these tips together when making your decision
Aviation insurance policies for a company’s private plane might include defined terms that can be challenging to comprehend and make it difficult to identify the nuances of the coverage and requirements you must satisfy to maintain the coverage. Confirm the coverage for each party, including the aircraft owner, lessee and any lender.
Two actions you can take to try to obtain the best rate and best insurance coverages for your business aircraft include:
• Start early to research available insurance.
• Work with a broker who specializes in aviation insurance.
Annual insurance renewals are an opportunity to evaluate the company’s current and future aircraft operations and ensure that the coverages fit proposed changes in the company’s aircraft operations.
Please contact Jetstream Aviation Law for legal assistance with the structure of the ownership and operation of a private plane.
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.
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.
