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:
- How Much Does Airport Insurance Cost?
- Why Do Airports Need Insurance?
- What Type Of Insurance Do Airports Need?
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?
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 airports, the question is not whether, but when, the next major peril will come along. Protected with the right airport insurance coverage, however, even larger incidents become more manageable.
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.
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 ISO General Liability Code(s): 40010, 40015
- Suggested Workers Compensation Code(s): 7402, 7403, 7422, 8010
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.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
Additional Resources For Miscellaneous Insurance
Find informative articles on miscellaneous businesses including the types of commercial insurance they need, costs and other considerations.
- Adult Daycare
- Agriculture, Forestry, Fishing & Hunting
- Bail Agent
- Check Cashing
- Control of Well
- Currency Exchanges
- Electric Utilities
- Employment / Staffing Agency
- Engraving Business
- Facility Support Services
- Flight Schools
- Mail Order
- Oil And Gas Lease
- Personal Concierge
- Photofinishing Lab
- Portable Sanitation
- Printers & Publishers
- Private Water Districts
- Process Server
- RV Parks & Campgrounds
- Security Guard
- Surety Bonds
- Unmanned Aerial Vehicles (UAV) Drone
- Waste Disposal Landfill
- Wedding Planner
An insurance contract is an agreement where one party obligates itself to make good the financial loss or damage sustained by a second party when a designated event occurs. The event must be fortuitous and happen by accident. The named insured must have insurable interest at the time of loss. One final point is that in order for any contract to be considered insurance, there must be a risk of loss.
Fortuitous Event - An occurrence largely beyond the control of any involved party; happening by chance; accidental; for example: fire, lightning, windstorm, explosion or flood.
Insurable Interest - In order to recover from a loss to property, the holder must have an insurable interest in the property at the time of the event or occurrence. An insurable interest is any right, title or interest in property where the holder of that right, title or interest sustains financial loss if the property is damaged or destroyed. Any lawful and substantial economic interest in the safety or preservation of the property from loss, destruction or damage also constitutes an insurable interest.
An entity does not have to be the property owner to have an insurable interest in it. Examples include, but are not limited to, mortgagees, trustees, vendors, lessees and bailees. Insurable interest for any entity must exist at the time the loss occurs.
Risk Of Loss - If property could never be destroyed, there is no risk of loss. If property must necessarily disintegrate or be destroyed, there is no risk of loss. Between these two extremes is the exposure of risk that can be insured.