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unfamiliar territory for the King Air market until recently. As a result, brokers often had to find multiple carriers to share the risk for single-pilot operations with hull values exceeding $5 million or liability limits over $25 million. This effectively halved the number of competing markets, exacerbating the challenges faced by operators.
Underwriting companies also took a closer look at the attritional losses within their portfolios. They observed a trend where fixed base operators required King Air owners to sign contracts that absolved the FBO of liability for any damage to the aircraft. This shift placed the burden of repair costs squarely on the aircraft owner’s insurance policy. Consequently, many carriers began charging additional premiums for policies that included “waiver of subrogation” language in hangar leases, further complicating the insurance landscape for King Air owners.
The implications of these changes extended beyond pricing and coverage structures. The cost of adjusting claims increased as King Air owners relied on their own policies to cover damages. Extra Expense coverage became a critical component of many policies, but insurance carriers began capping the amounts they would pay per day to mitigate their exposure to attritional losses. Additionally, underwriters started to refuse coverage or impose additional premiums for operators engaged in dry leasing their King Air to third parties, recognizing the added liability risks associated with such arrangements.
Sample aviation insurance policy
8. Replacement Aircraft / Extra Expense – If an Aircraft shown in item 5 of the Declarations sustains Physical Damage to which this Policy applies, the Company agrees to reimburse you for Extra Expense associated with obtaining a Replacement Aircraft for use while the damaged Aircraft is being repaired. The Company’s limit of liability under this extension shall not exceed $5,000 per day for up to five (5) days.
Training requirements and pilot qualifications also came under scrutiny during the hard market. The age of pilots became a contentious issue, with some experienced King Air pilots facing significant premium increases and reductions in liability limits as they reached age 75. This prompted many operators to develop long-term transition plans to manage the perceived risks associated with aging pilots.
Be a strategic insurance consumer
As we move forward and leave behind the painful experiences of recent insurance renewals, it is essential for King Air owners to adopt a more strategic approach to securing coverage. With new markets entering the scene and bringing more options, now is the time to assess operational risks to take full advantage of the emerging buyer’s market in the 2025 insurance landscape. King Air owners should consider the following key factors.
Are single-pilot or crew operations the best fit for your mission? Each option comes with its own set of risks and benefits, and understanding these nuances is essential for making informed decisions.
Are your pilots and maintenance technicians employees or 1099 contract professionals? Employment status can have significant implications for insurance coverage and liability, and it is essential to ensure that all personnel are properly classified to avoid potential issues down the line.
For those with pilots over age 65, proactively engaging in discussions about managing perceived risks associated with older pilots can help mitigate concerns and demonstrate a commitment to safety. Creating a long- term transition plan that outlines steps to address these issues can also be beneficial.
Review contracts with FBOs and other third-party service providers. It is essential to understand whether you are unnecessarily assuming liability for the negligent behavior of these entities. By clarifying responsibilities and ensuring that contracts are fair and equitable, owners can protect themselves from potential claims that were not their fault.
10 • KING AIR MAGAZINE
JANUARY 2025