Michigan Airport Insurance Policy Information
Michigan Airport Insurance. Airports, facilities designed to allow aircraft to take off and land safely, undoubtedly play an essential role in the global economy, both by serving commercial passenger airlines and facilitating the fast transportation of goods across enormous distances.
Airports provide passenger waiting areas, hangars, runways, landing strips, ground control and tower control operations for private or public air transit operations. Services offered by airports generally include towing, refueling, aircraft maintenance and repair, aircraft parts sales, rental space within hangars for maintenance or storage of aircraft, and baggage handling.
Additional services that may be available are aircraft rental or charter, aerial photography, crop dusting or aerial applications, aerial advertising and surveying, retail stores, shuttle services, lounges, snack bars or restaurants, and on-site hotels.
MI airports may be small county or municipal operations or major national or international facilities. They may specialize in passenger transport or cargo transport. All are regulated and controlled by the Federal Aviation Administration (FAA).
Air traffic controllers are federal employees and are subject to governmental rules and regulations. Most airports have at least one terminal containing an aircraft control tower. Airports are responsible for scheduling and controlling the arrival and departure of aircraft, based on the flight plans filed by the operators.
Airports have on-site emergency facilities for fire and medical purposes. Some of the fire and medical operations are employees of the airport; others will be independent contractors.
Since 2001, airports have been required to work with the Transportation Security Administration (TSA) to improve public safety through screening of passengers and cargo being transported by aircraft. While most airports have TSA agents on site to do this, a few larger airports have opted out of the federal program and use TSA-approved outside providers.
Some airports use low-flying drones, or unmanned aerial vehicles (UAVs), to enhance perimeter and parking lot security.
Many people will imagine large hubs that feature multiple terminals, gates, waiting areas, shopping and dining facilities, and passport control. Not all airports are large, however. Some smaller-scale airports primarily serve airlines that transport cargo, are exclusive to military operations, or serve as a base of operations for flight schools offering flying lessons to hobbyists. Some airplanes are government-owned, while others are commercially operated.
Regardless of the type of airport, these important facilities inevitably face a number of serious risks that could easily lead to massive financial losses. What types of insurance might airports need to protect themselves? Discover more in this brief guide.
Why is Michigan airport insurance so important? What type of coverage do you need? Below, you'll find the answers to these questions and more so that you can make sure that you, your employees, the people that you serve - and your business as a whole - are properly protected.
Michigan airport insurance protects your aviation operations from lawsuits with rates as low as $247/mo. Get a fast quote and your certificate of insurance now.
Why Do MI Airports Need Insurance?
Not only are airports simply required to carry insurance for legal reasons, they also, like any other commercial venture, have to contend with the reality that minor and major perils alike could threaten their fiscal health at any time. Carrying comprehensive insurance is absolutely essential in handling these risks.
Perils that lead to property damage represent one risk category. Acts of nature as varied as lightning strikes, wildfires, and serious floods could damage an airport's infrastructure, leading to exorbitant repair costs as well as costly business interruptions. Theft and vandalism are two further examples of threats, along with the possibility that a crash landing leads to damage.
The other major risk category would come in the form of liability. Passengers, airlines, and even homeowners living near the airport could file a lawsuit for virtually any reason - because a procedural glitch caused an aircraft to be grounded for longer than planned, due to allegations that the airport causes noise pollution, or because a passenger trips on a wet floor, to name some examples. Employees, too, may be injured while at work, potentially resulting in lawsuits.
Especially for larger MI airports, the question is not whether, but when, the next major peril will come along. Protected with the right Michigan airport insurance coverage, however, even larger incidents become more manageable.
What Type Of Insurance Do Michigan Airports Need?
Because no two airports are alike, it is no surprise that there is no such thing as a universal airport insurance plan that automatically meets an airport's needs.
Factors such as the jurisdiction in which an airport is based, the volume and type of traffic that passes through it, and the nature of the amenities it provides all influence the kinds of coverage an airport may require. While airports should turn to commercial insurance brokers deeply familiar with aviation to find out more, it is ideal to partner with an insurer who specializes in this niche.
The following are examples of the core types of Michigan airport insurance coverage that may be needed:
- Airport Liability - As facilities frequented by members of the public, airports always face the risk that they will be sued - whether because someone alleges that the airport was responsible for causing them injury, or that the airport's activities resulted in damage to their property. Airport liability insurance will help cover the legal costs associated with such lawsuits.
- Environmental Liability - Should someone allege that the airport, as opposed to an individual airline, was responsible for causing environmental damage or pollution, the resulting litigation is likely time-consuming and costly. Environmental liability coverage pays for attorney fees and other legal costs up to a predefined limit.
- Commercial Property - Any commercial facility further requires commercial property coverage, which shields a company from the costs associated with property loss or damage resulting from perils like acts of nature, theft, and vandalism.
- Workers Compensation - If an employee sustains a workplace accident or injury, worker' comp insurance covers their medical bills as well as any income they lose while they recover. In the most extreme cases, death benefits are likewise covered.
While these types of Michigan airport insurance are key, they are also just a glimpse into the coverage needs aviation businesses may have. Commercial auto insurance and cyber security coverage are two more examples of policies airports may require, for instance.
To get the full picture, airports should always carry out in-depth evaluations together with a skilled commercial insurance broker.
MI Airport's Risks & Exposures
Aircraft hull exposure covers damages to owned aircraft. Pilot error, including failure to consider weather conditions, can result in a costly accident. Pilots must adhere to all FAA regulations, including the need for ongoing physical examinations. All aircraft must be maintained according to manufacturers' specifications, and records of such maintenance kept in a central location.
Aircraft liability exposure covers injuries to passengers and damage to property of others. Pilots must meet all FAA regulations, including current licensing, for the aircraft. They must obtain proper clearance before flying out of or into airports. They must participate in regular training activities to maintain skills.
Aircraft must be maintained and records kept of the maintenance. Crash landings can result in severe injury or death to passengers.
Hangarkeepers legal liability exposure, which is similar to garagekeepers legal liability, provides coverage while non-owned aircraft are in the hangar. Issues to consider depend upon who is responsible for the aircraft, what services are provided, and what security arrangements are in place for the hangar.
Premises liability exposures are substantial due to the high number of visitors to the premises. The exposures increase if passengers board in hangar areas for charter services or for flight schools. Floor coverings should be in good condition with no frayed or worn spots on carpet and no cracks or holes in flooring. Steps and uneven floor surfaces should be prominently marked.
Sufficient exits must exist and be well marked, with backup lighting systems in case of power failure. Parking lots and sidewalks need to be in good repair, with snow and ice removed, and generally level and free of exposure to slip and falls. Elevators, escalators, people movers and other conveyances require routine inspection and maintenance.
Noise may affect neighboring properties. The issue of the security of passengers and employees from attacks by terrorists, hijackers, extortionists, and others remains high.
Adequate security must be in place throughout the entire airport, with entrance points inaccessible to unauthorized persons. Disaster planning should be in place in the event of a terrorist or hijacker attack.
If the airport contracts out some of its services, the contracts should outline all responsibilities of the airport and the contractor.
Environmental impairment exposure is moderate due to the potential for air, land, and water pollution from the use and storage of fuels. Storage and disposal procedures must comply with all Environmental Protection Agency (EPA) requirements. If there are fuel tanks on premises, a UST policy may be needed.
Products liability exposure depends on the services that the airport handles. Most, such as food service and refueling, are contracted out to fixed base operators and other entities. Dispensing the wrong fuel or contaminated fuel into an aircraft during refueling can bring a plane down. All fuel deliveries should be monitored to make sure the appropriate fuel is placed in the appropriate tank.
Workers compensation exposure can be high. Many airport workers are federal employees or work for independent contractors. If exposures are limited to office activities, concerns include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations.
Fire and explosion are a constant concern in fueling and repair areas. Common injuries include slips and falls, burns, falling pieces, strains and sprains on backs from lifting and working in awkward positions. Safety equipment should be required.
Propellers and other moving parts of planes can injure an employee during operation. All controls must be in place and carefully monitored.
Property exposures are high as all buildings are subject to damage from aircraft. Ignition sources include cooking equipment, heating and cooling systems, and electrical wiring. Buildings with fueling, refueling, or repair operations have significant fire potential and should be located away from other buildings to prevent the spread of fire. Smoking should be prohibited.
Repair operations, especially welding and painting, must be monitored with controls in place. Outside equipment, lighting, and fixtures can be damaged by wind, elements, and collision with aircraft or vehicles.
All airports are potential targets for terrorist attacks. The premises should be secure from unauthorized access by others. Complete plans must be in place to deter and detect terrorism.
Business income exposures can be substantial as backup facilities are unlikely to be available in the event of a major shutdown of operations.
Equipment breakdown exposures may be high as operations are dependent on equipment being available to monitor air traffic and weather conditions. All equipment should be maintained on an ongoing basis.
Crime exposure is due to employee dishonesty and money and securities. The exposure increases without background checks on all employees. Ordering, billing and disbursing must be separate functions. The books must be audited regularly internally and at least once a year externally.
Physical inventories, including fuel, must be made on a frequent basis to prevent employee theft. Money and securities exposure depends on the operations the airport directly controls and which are leased out.
If there is a money exposure, regular deposits should be made. Appropriate security should be in place, especially in the evening hours and hours when there is limited travel.
Inland marine exposures are from accounts receivable if there are billings, communications equipment, computers, contractors' equipment and tools, and valuable papers and records for customers', regulatory and suppliers' information. All should be duplicated and copies kept off site for easy replication following a loss.
The towers, radar and all communication carrying structures should be protected by barriers to prevent vandalism, aircraft and terrorism damage. Contractors' equipment may be used to work on the exterior of the buildings or to tow aircraft.
Commercial auto exposure is generally limited to hired and non-owned automobile exposure if employees use their own vehicles to run errands for the airport. If there are owned vehicles, all drivers must have appropriate licenses and acceptable MVRs. Vehicles must be well maintained with records kept in a central location.
Michigan Airport Insurance - The Bottom Line
To find out more information about the exact types of Michigan airport insurance policies you'll need, how much coverage you should carry and the associated premiums, consult with a reputable broker that is experienced in commercial aviation insurance.
Michigan Economic Data And Business Insurance Requirements
Business owners who are interested in establishing operations Michigan must have a thorough understanding of the state's economy. They should also familiarize themselves with any regulations and limits that state may have in place for commercial insurance.
Any entrepreneur who is thinking about starting a business in the Great Lake State first needs to determine if it's a feasible location for business operations. As such, it's important to have a keen understanding of pertinent details regarding the economy of Michigan, in addition to the types of insurance coverage that are mandatory for corporations that operate within the state.
Economic Trends for Businesses In Michigan
After a long period of stagnant job growth in the early part of the 21st century, MI has been experiencing a steady increase in employment gains. Between 2009 and 2018, the state has enjoyed a period of uninterrupted job growth; the longest stretch of job growth since World War II. According to economists at the University of Michigan. While there has been a slight decline in the rate of job growth, job creation continues and forecasters say will continue for the next two years, into 2021.
In 2018, an estimated 55,200 jobs were created; in 2019, it's expected that 35,800 jobs will be created, and in 2020, economists believe that there will be a total of 39,300 jobs created in Michigan. While that rate of growth is 1.9 percent slower than the job growth rate between 2011 and 2016, it is still a steady increase overall. In total, approximate 683,200 jobs will be created in MI between 2099 and 2020; almost four out of the five jobs that were lost during the early part of the 21st century will be recovered.
While the unemployment rate has steadily improved, it is still above the national average. In March of 2019, the national unemployment rate was 3.8 percent, while in the state of Michigan, it was 4.0 percent. Mid-Michigan has experienced the largest growth rate in the state, and according to forecasters, it looks like that trend will continue, moving forward. Industries that are expected to see the most growth include:
- Energy, due largely to research and development in clean energy
- Food and agriculture
- Transportation and mobility
- Healthcare industry
- Information and technology
In the state of MI, business owners are not legally required to carry liability insurance; but most entrepreneurs opt to invest in a General Liability or Business Owner's Policy (BOP). A commercial auto insurance policy is also required for any businesses that use motor vehicles to conduct any aspect of their business operations. Workers' compensation insurance is also required for any businesses with non-owner employees. While the following forms of coverage are not required, depending on the type of business you operate, they are recommended:
- Data breach insurance
- Business income insurance
- Commercial Umbrella insurance
Additional Resources For Aviation Insurance
Learn about aircraft and aviation liability insurance - a specialized form insurance that provides coverage for hull losses as well as liability for passenger injuries, environmental damage and third-party damage caused by aircraft accidents.
- Insurance Aviation Terms Glossary
- Aerial Applicators
- Flight Schools
- Hot Air Balloon
- Unmanned Aerial Vehicles (UAV) Drone
Aviation policies often have to be written so that they cover the liability of the owner and the operator relating to bodily injury to passengers or to people who aren't passengers, as well as for property damage.
The policy will cover medical costs, including the loss of income, paid to any passengers who are suffering from permanent or total disability but without proving negligence.
In other words, you can consider aviation insurance a sort of liability insurance for the aviation industry.
Aviation insurance often covers various types of risks such as:
Aircraft Hull Insurance - It covers the aircraft itself in the event of accidental damage, regardless of where it might happen. Spares - The policy will cover any damage or the loss of spare parts relating to the aircraft or the engine if they aren't attached to them.
Passenger Legal Liability Insurance - The policy will cover both the airline and the operator in the event passengers face bodily harm, death, or loss of their baggage while in the custody of the airline or its operator.
Third-Party Legal Liability - The policy will cover the airline and the operator when there is damage to a third-party property on the ground for which they may be held liable.
Cargo Liability Insurance - The policy covers damage or loss to the consignments that are carried by the insured airline. The shipper and consignees will claim against the carrier; that's when the insurer will cover the airline. The policy also covers post office mail that is often shipped via airline operators.
Minimum recommended coverage: Building, Business Personal Property, Business Income and Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Communication Equipment Floater, Computers, Contractors’ Equipment, Valuable Papers and Records, General Liability, Employee Benefits, Environmental Impairment, Umbrella, Hired and Non-Owned Auto, Workers Compensation, Aircraft Hull, Aircraft Liability & Hangarkeepers Legal Liability.
Other coverages to consider: Earthquake, Equipment Breakdown, Flood, Cyber Liability, Employment-related Practices, Underground Storage Tank, Business Automobile Liability and Physical Damage and Stop Gap Liability.
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