Frequently Asked Questions About Small Business Insurance
Aviation Risks Insurance FAQ. Highly specialized insurance policies are designed and developed to protect aviation operations and their exposures.
Extensive liability protection is needed for aircraft, airport and aircraft servicing operations. Adequate and appropriate insurance coverage for pilots, flight attendants, and service and maintenance personnel is critical.
Because the funds invested in each aircraft are significant, proper insurance against physical damage is another major concern.
We wanted to provide a deeper dive into small business insurance to help our readers get a better understand of the commercial insurance policies they want and need with the Aviation Risks Insurance FAQ.
Read the Aviation Risks Insurance FAQ to learn what type of commercial insurance coverages are right for your aviation operation - including liability, property, workers compensation and other specialty policies.
According to Wikipedia, aviations risks are, "risks associated with aviation activities, related to, or in direct support of the operation of aircraft."
Aviation Risks include - but are not limited to - the following types of businesses:
You can reference the Insurance Definitions, Dictionary And Glossary to better understand the commercial insurance policy terms and language used in our Small Business Insurance FAQs.
Following are some suggested commercial policies and coverages applicable for aviation operations:
Package policies are the most convenient way to combine coverages. Even if an aviation risk is not able to package its liability exposures, its property, crime and inland marine forms can often be packaged together.
Aviation operations do not normally qualify for businessowners policy coverage because general liability aviation exposures are not eligible, but locations containing only offices and located away from an airport may be eligible for coverage.
Types Of Aviation Risks Package Policies:
A thorough property inventory is needed to determine the items to be covered under the aircraft hull policy, the inland marine scheduled property floater, and those that should be insured under property coverage forms. The aircraft itself is not eligible for coverage under most property coverage forms but other types of property are. Most airborne property is excluded. Business personal property transported by air should be covered on an inland marine policy.
The building and personal property coverage form is the most widely used property form, but output policies are gaining popularity because of their pricing and coverage flexibility.
Air transportation operations are often required to continue following a loss, regardless of the situation. As a result, extra expense coverage becomes the primary time element coverage with business income coverage considered an option. Leasehold coverage should be considered if the operation has an advantageous long-term lease.
Types Of Property Coverages:
Aviation-related property is often fairly mobile. The property inventory listing should be thoroughly reviewed and any mobile property or property that regularly moves between locations should be covered under the appropriate inland marine coverage form. Computer and camera exposures are part of most aviation risks.
The perils insured or covered causes of loss in most inland marine coverage forms are generally equal to or better than the special causes of loss form that applies to property coverage. As an example, many inland marine forms include earthquake and flood coverage.
Types Of Inland Marine Coverages:
The commercial crime coverage includes a number of coverages. While many of the coverages may be appropriate for a given aviation risk, often the most important is the employee theft coverage because of the value of property that can be stolen by trusted employees.
The manner in which operations are conducted dictates the coverage that should be written. Some of the more limited crime coverage options listed below may be more appropriate in a specific risk than broader coverages available.
Types Of Crime Coverages:
Aviation operations are required to have a license or permit in order to conduct operations. Government entities that issue the licenses and permits require a bond to guarantee that the insured will comply with all applicable rules and regulations.
If an aviation operation has a contract with a government entity to supply services, it must supply a bond to guarantee performance as contracted for or payment of a previous mutually agreed-to penalty.
Types Of Surety Coverages:
Liability exposures for aviation risks are normally insured by an aviation general liability policy. However, operations conducted away from an airport or airfield may be insured by a standard general liability policy for the specific type of operation involved.
Restaurant and bar operations are not unusual so liquor liability coverage should be considered.
Types Of Liability Coverages:
Aviation risks may employ individuals who provide services that require errors or omissions coverage. In addition, these facilities routinely employ security forces at the air facility who should be covered by law enforcement professional liability coverage.
Professional and errors and omissions claims are based on malpractice, error or mistake made in the performance of professional duties. Since these actions or inactions are excluded in the general liability policy, separate professional liability coverage must be purchased.
Types Of Errors And Omissions (E&O) Coverages:
Aviation operations often have a substantial number of vehicles on the premises that may or may not be eligible for coverage under a business auto policy. In addition, vehicles must frequently go off premises to run errands, make deliveries and generally assist in other aspects of the operations. Garagekeepers insurance coverage may also be needed to cover customers' vehicles left in the care of the insured on its premises.
Types Of Business Auto Coverages:
Most employers are required by state statute to provide coverage through a workers compensation policy for on-the-job injuries sustained by their employees. Special rating methods apply when aircraft exposures are involved.
If the air facility makes extensive use of independent contractors or subcontractors, certificates of workers compensation coverage from each one should be obtained. This assists in eliminating gaps in coverage when such contractors are injured and then claim to be employees.
Types Of Workers Comp Coverages:
Typical underlying policy limits are never sufficient to respond to most air-related damages. Appropriate excess limits must be purchased. An excess liability insurance policy may be more effective than an umbrella policy because the excess coverage exactly follows the coverage of the underlying policies.
Types Of Excess Liability Coverages:
The coverages described in this area are specific to the aviation needs of classifications.
Types Of Aviation Coverages:
Aviation operations have specialty exposures similar to other operations but also have unique exposures related to flight. The potential for aircraft to be used in terrorist activities has added to the underwriting concerns.
An inventory of activities and exposures should be compiled to determine if coverage under any of the following policies should be considered. Flight schools may especially want to consider student-related coverages and privacy concerns.
Types Of Specialty Coverages:
There are many commercial insurance policies available for Aviation Risks. To find out what types of coverage your business needs, speak to a professional insurance broker with experience in insuring aviation businesses
Learn about the coverages available for specific industires with the Insurance FAQs below: