Winter is upon us. If you live in the Snow Belt, it’s likely you have the shovels and snow blowers out of storage. We all want to keep our sidewalks and driveways clear of ice and snow for our safety, as well as for those who may visit. This same desire holds true for the ramp and sidewalks around our hangar. What would happen if one of your guests slipped and fell on ice outside your hangar, or while boarding your aircraft? Or the independent contractor who comes to your hangar at night to clean your King Air; what happens when they walk into the trailing edge of the wing and one of the static wicks hits them in the eye?
Managing risk is a good start, but it’s important to make sure you are prepared to adequately respond to a potential injury. There are three areas of your insurance policy to review regarding medical coverage: as it relates to your owned aircraft, non-owned aircraft, and airport premises.
Check the declarations page of your policy to determine the amount of medical coverage you currently have. It may be $5,000, $10,000, $25,000, $50,000, $100,000, or more. My first recommendation – don’t accept less than $50,000 of medical coverage. Over the years, the insurance market has gotten very competitive, not just with price, but with coverages too. At one time it was standard to have only $5,000 or $10,000 of medical coverage on your policy; now, it is $50,000, or more. As I have mentioned in previous articles, this extra coverage will not cost you any additional premium in today’s market.
Checking the amount of medical coverage on your declarations page is just the beginning of making sure you have what’s needed. Next, check the fine print of your policy to see if it meets your needs, or if further modification needs to be requested. You want medical coverage to be a per person limit, not a per passenger limit. A per person limit will ensure you will have coverage for crew and people outside of the aircraft, while a per passenger limit would only cover those inside the aircraft riding as a passenger.
Regarding non-owned aircraft, below is an example from a policy of what you need to be aware of when it comes to determining whether or not you have medical coverage:
“The following conditions must be satisfied in order for this extension of coverage to apply:”
➤ The other aircraft must have a Standard Airworthiness Certificate issued by the U.S. Federal Aviation Administration or have an equivalent certificate issued by another government.
➤ The other aircraft cannot be owned or leased by you, your spouse, or any member of your household.
➤ The other aircraft cannot be a helicopter, unless your policy already covers a helicopter.
This is just an example of three conditions from one policy, your personal policy may be different.
A great example of a non-covered claim: You have an employee riding in a helicopter with a vendor and it takes a hard landing injuring your employee. During the claims process, it is discovered that the PIC didn’t meet the pilot warranty, so there is no coverage from the vendor’s aircraft policy. Your employee then sues you, but since you only have a King Air and no helicopter on your policy, you don’t have coverage per the exclusion. If you don’t like these limitations, ask your broker to have the policy endorsed to remove them.
Airport premises medical coverage is also crucial, and depending on how your policy is worded, you may have a huge gap in what is covered. This is something I am meticulous about for my own policy. We like to host hangar cookout parties with as many as 200 people flying/driving in a couple of times a year. If someone slips and falls around the hangar we own (very crucial word there, “own”) we could be negligent. One of our clients just built a hangar and is renting some of the space to a friend. He ended up obtaining a separate policy to cover his liability exposure because of the wording in his original policy, in conjunction with generating revenue from hangar rent. The following is a sample of broad wording for medical coverage for airport premises:
“If a person is injured in an occurrence while on airport premises that you own, maintain, or use to park or store your aircraft, and provided that person is on the airport premises with your permission, insurance will pay all reasonable medical expenses that they incur within a year of the occurrence. But these expenses will only be paid up to the applicable coverage limits.”
Reasonable medical expenses include:
1. Fees for doctors, surgeons and dentists;
2. Costs for ambulance, x-ray, and hospital services;
3. Fees for professional nurses; and,
4. Costs for prosthetic devices.
“If a person dies within a year of the occurrence as a result of injuries suffered in the occurrence, insurance will pay to the surviving spouse of the deceased or to their estate, reasonable funeral expenses.”
The above excerpt includes “owned” airport premises, but some policies exclude hangars that you own, so be sure you review this section of your policy.
While many of you reading this article may have never had a claim, be prepared for the day you do by having the right coverage. I’ve seen an independent contract pilot walk into a non-moving feathered propeller during a preflight inspection on a King Air 200 and need stitches on his forehead. Note that since he’s an independent contractor, there was no worker’s compensation coverage available. Last spring, a good friend of mine tumbled off the back of the wing of my Bonanza while deplaning. He was scratched up pretty good, and I recommended he go to the doctor to make sure he didn’t have a concussion. His head dented the flap which had to be reskinned. Thankfully, there was coverage in place to cover the damage, as well as his injuries. Accidents happen, and when they do, coverage is crucial.
By having the right medical coverage limits and policy wording, you can potentially avoid being sued. Review your policy for adequate limits and coverage. If you don’t like what you see, ask to have the limit or the language modified. If you don’t understand it, ask your broker for clarification. It is a buyer’s market for aviation insurance; chances are, you can get what you want for no additional premium. Remember, they can’t tell you “no” if you don’t ask.
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