Page 10 - Volume 10 Number 7

Double Coverage
= No Coverage? by Kyle White
In today’s society, nearly everyone wants to have two of everything – two cars, two houses, two airplanes, etc. We have come to believe more is better. However, insurance does not always work that way. If you have coverage for something in one policy, and that same coverage is in another policy, instead of double coverage, what you will likely have is an expensive problem.
Most King Air policies are very detailed, and over the last decade have become even more so with enhanced coverages to benefit the aircraft owner. An insurance company does not want to give you coverage for a peril if you have it covered somewhere else. To avoid this, they put a clause in the policy that states, “if you have coverage available to you under another policy, this policy is excess and the other policy is primary.”
the business owns and premises liability associated with those properties. There may also be an auto policy that does not exclude aviation exposures.
It is imperative you evaluate all of your policies to find the coverage overlap and the “if you have coverage somewhere else” terminology. If you fail to do this, you may find yourself in an expensive battle while your lawyers convince the insurance companies to cooperate with each other and settle your claim. There are many coverage overlaps our industry fails to address. For the purpose of brevity, we will address a few of the most common – premises liability, non-owned aircraft liability and contents – keep in mind, there are many more!
We routinely come across double coverage for premises liability. Many King Air owners are based outside of metropolitan areas, at rural airports. In doing so, they may find that there isn’t an adequate hangar to house their aircraft, so they work with the airport authority and build their own. Like other property the King Air owner has, they purchase an insurance policy to protect their asset against physical damage and liability that may arise out of ownership, maintenance, or operation. Some King Air owners may also find themselves contractually obligated to do the same, even if they are only involved in a long-term lease. There are also FBOs that have attorneys create detailed contracts to
Now, imagine if you have two policies and both of
the policies have this wording regarding a particular
peril. If both policies say the other is “primary”
and theirs is “excess,” who pays first? Who has
two insurance policies, you ask? I would venture
to say nearly everyone I know has two insurance
policies (or more)! Home, auto, boat, aircraft and
many more. For the purpose of this article, we’ll
keep it aviation related. Many people reading this
are involved in a management function of a business.
The company you support may have an aircraft
policy to protect the King Air and the liability
associated with owning, operating, and maintaining
the aircraft. Additionally, the company may have a
property policy to protect against physical damage
of a hangar you own or lease. Or, you may have a
corporate property policy that protects all buildings protect the airport authority. We can usually
If both policies say the other is “primary” and theirs is “excess,” who pays first?
8 • KING AIR MAGAZINE
JULY 2016