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from a liability standpoint. Under a third party dry lease as a lessee, you have significantly more exposure and responsibility than if you were to simply charter the aircraft.
As a lessee, you are in a contract that gives you operational control and you have acknowledged you believe the aircraft is in airworthy condition, along with many other commitments. It is crucial that a formal contract/lease is signed and put on file with the insurance company so the insurance carrier can provide you with a written endorsement and certificate stating the lessee is covered under the aircraft policy. This could extend into an “Additional Named Insured” scenario as well, as you do not want to just be covered with “respects to operations of the Named Insured.” You want to ensure the policy will extend liability coverage to you in the same manner it would if you owned the aircraft. The hull portion of the policy would still solely benefit the aircraft owner by adding the “loss payee” endorsement as stated earlier.
For FAA Part 135 charter certificate holders, you may have clients request a certificate of insurance naming them as an “Additional Insured” under your policy. This is to provide them coverage when being sued as a result of your (the operator’s) negligence. While it is possible the definition of the policy may automatically extend coverage to them under the “any person who is
a passenger with your permission” bullet point, it gives an added layer of coverage verification and confirms to the customer you have “commercial use” approval by the insurance company. It will also disclose how much liability coverage the aircraft operator maintains.
The King Air family of aircraft is one of the most utilitarian turbine aircraft flying today. Because of this, the ownership profile for the King Air is very diverse. Every owner situation is unique and your insurance policy should be unique to you as well. In the event of a claim, everyone associated with that King Air is at risk of being sued, whether you were negligent or not. If your policy is set up correctly, it will pay for your cost of legal defense. While this article has focused on “who is covered,” it is only part of the equation. The “use,” “conditions,” and “exclusions” portions of the policy are also important factors in determining coverage validation.
For a more complete picture of how to structure your policy and ensure adequate coverage, refer to the article “It’s Covered Unless It Isn’t” in the September 2023 issue of King Air magazine. KA
Kyle P. White is an aviation insurance specialist for a global insurance brokerage company. He has professionally flown King Air 90s and B200s and holds an ATP and multi-engine instrument instructor license. You can reach Kyle at kpwhite816@gmail.com.
18 • KING AIR MAGAZINE
JANUARY 2024