Airport Insurance Policy Information
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.
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 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.
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.
Below are some answers to commonly asked airport insurance questions:
- What Is Airport Insurance Insurance?
- How Much Does Airport Insurance Cost?
- Why Do Airports Need Insurance?
- What Type Of Insurance Do Airports Need?
- What Does Airport Insurance Cover & Pay For?
What Is Airport Insurance Insurance?
Airport insurance is insurance coverage that is designed to protect airport operators and their tenants against financial losses that may result from a wide range of risks, including property damage, liability claims, and business interruption.
This type of insurance typically covers the airport itself, as well as any buildings, equipment, and other assets located on the airport property. It may also provide coverage for loss of income and other expenses that may be incurred in the event of an accident, incident, or other disruption to airport operations.
How Much Does Airport Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for airports ranges from $247 to $379 per month based on location, size, services offered, revenue, claims history and more.
Why Do Airports Need Insurance?
Airports need insurance to protect against potential financial losses due to a variety of risks such as accidents, natural disasters, and liability claims. These risks can include damage to airport infrastructure and equipment, loss of revenue due to flight cancellations or delays, and claims made by passengers or employees.
Insurance coverage can also protect against legal fees and other costs associated with lawsuits or regulatory investigations. Additionally, insurance can help airports meet regulatory requirements and maintain the financial stability necessary to continue operating.
Airports also need insurance to protect against potential losses from cyber threats, such as data breaches or hacking. This is becoming increasingly important as airports rely more heavily on technology and digital systems to manage operations and passenger information.
Another important aspect of airport insurance is liability coverage. Airports are responsible for the safety and well-being of passengers, employees, and contractors on their property. Liability insurance can protect the airport against claims of personal injury or property damage that may occur on the premises.
In addition to these risks, airports may also need insurance coverage for their aircraft and ground handling equipment, such as baggage handling and maintenance equipment. This is important for protecting against damage or loss of these assets, which can be costly to replace or repair.
Overall, airport insurance is a critical component of airport operations, helping to protect against potential financial losses and ensuring the airport can continue to operate smoothly and efficiently.
What Type Of Insurance Do 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 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 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.
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.
What Does Airport Insurance Cover & Pay For?
Airports can be sued for various reasons, including:
Personal Injury Claims: Airports can be sued for personal injuries that occur on their premises, such as slips, trips, and falls. An airport may have commercial general liability insurance that can cover the costs of medical expenses, lost wages, and other damages resulting from personal injury claims. This insurance can help pay for legal fees and any settlement or judgment against the airport.
Property Damage Claims: Airports can also be sued for property damage caused by negligence or accidents, such as baggage handling, ground equipment collisions, or aircraft damage. An airport may have property insurance that covers damage to buildings, vehicles, and other assets. This insurance can help pay for the cost of repairs or replacement of damaged property and can also cover legal fees and any settlement or judgment against the airport.
Environmental Claims: Airports may face lawsuits related to environmental contamination, such as soil or groundwater pollution from fuel storage or de-icing operations. An airport may have environmental liability insurance that covers the costs of cleaning up pollution and environmental damage caused by airport operations. This insurance can also cover legal fees and any settlement or judgment against the airport.
Employment-related Claims: Airports may also face lawsuits from employees or former employees, including claims of discrimination, harassment, wrongful termination, or wage and hour violations. An airport may have employment practices liability insurance (EPLI) that can help cover the costs of legal defense and any settlement or judgment resulting from employment-related claims. EPLI can also cover claims of discrimination, harassment, wrongful termination, and other employment-related issues.
In conclusion, airports face various risks and potential liabilities that can lead to lawsuits. Insurance can provide protection and financial support in case of legal claims and can help mitigate the financial impact of such events.
Commercial Insurance And Business Industry Classification
- SIC CODE: 4581 Airports, Flying Fields, And Airport Terminal Services
- NAICS CODE: 488111 Air Traffic Control, 488119 Other Airport Operations
- Suggested Workers Compensation Code(s): 7402 Aviation - Air Traffic Controllers Under Contract With the FAA, 7403 Aviation - All Other Employees & Drivers, 7422 Aviation - NOC - Other Than Helicopters - Flying Crew, 8010 Store - Hardware
Description for 4581: Airports, Flying Fields, And Airport Terminal Services
Division E: Transportation, Communications, Electric, Gas, And Sanitary Services | Major Group 45: Transportation By Air | Industry Group 458: Airports, Flying Fields, And Airport Terminal
4581 Airports, Flying Fields, And Airport Terminal Services: Establishments primarily engaged in operating and maintaining airports and flying fields; in servicing, repairing (except on a factory basis), maintaining, and storing aircraft; and in furnishing coordinated handling services for airfreight or passengers at airports. This industry also includes private establishments primarily engaged in air traffic control operations. Government air traffic control operations are classified in Public Administration, Industry 9621. Aircraft modification centers and establishments primarily engaged in factory type overhaul of aircraft are classified in Manufacturing, Major Group 37, and flying fields maintained by aviation clubs are classified in Services, Industry 7997.
- Air traffic control, except government
- Aircraft cleaning and janitorial service
- Aircraft servicing and repairing, except on a factory basis
- Aircraft storage at airports
- Aircraft upholstery repair
- Airfreight handling at airports
- Airport hangar rental
- Airport leasing, if operating airport
- Airport terminal services
- Flying fields, except those maintained by aviation clubs
- Hangar operation
Airport Insurance - The Bottom Line
To find out more information about the exact types of 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.
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
- Specialty Aircraft And Airports
The aviation industry requires insurance for a number of reasons
Firstly, it is a highly regulated industry with strict safety standards that must be met. Accidents or incidents can occur despite these measures, and insurance helps to cover any resulting damages or liability.
Secondly, the cost of repairing or replacing aircraft and associated equipment can be extremely high. Insurance helps to mitigate these costs in the event of an accident or damage.
Thirdly, the aviation industry operates on a global scale, with aircraft and personnel often crossing international borders. Insurance helps to protect against any legal issues that may arise in different countries.
Finally, the aviation industry is constantly evolving and facing new risks and challenges. Insurance helps to provide a safety net in the face of these unknown risks.
In summary, insurance is an essential component of the aviation industry as it helps to cover potential damages, liability, and new risks. It allows the industry to operate smoothly and safely, ensuring the safety and well-being of both passengers and crew.
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.