Page 20 - Volume 13 Number 10

Third Party
Liability
by Kyle P. White
When it comes to addressing claims, there are two parts to your King Air insurance policy. One is for physical damage to your aircraft and the second is for third party liability. For this article, I am focusing on the latter.
The hull and liability policy is very broad in nature. In the insurance industry there is a general understanding that “if it doesn’t say it isn’t covered, then it is covered.” The policy is designed to protect the King Air owner from occurrences that arise from the “ownership, operation or use” of the aircraft that causes bodily injury or property damage.
Every day, claims transpire that don’t make the NTSB reports. In the insurance industry we call these attritional losses, which are high frequency and low severity; occurrences such as slips and falls, hangar rash and FOD claims. Sophisticated insurance buyers try to limit their exposure to these types of claims in a variety of ways. If you are working with a large FBO and have read your hangar lease, you are nodding your head “yes” in agreement with me right now. The FBO intends to
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protect their balance sheet and insurance program. They do this by pushing as much liability and opportunity for claims back to you and your insurance policy.
As the aviation insurance market continues to narrow, resulting in less coverage and higher rates, it is imperative to understand what exposures you have, the ones you are assuming and how you are managing them. The next time you head to the airport, look around you from the moment you drive onto airport property and think “risk.” Once you drive through the gate you have “on airport auto liability” exposure. Perhaps you hired a car service or Uber? You’ve contracted with them, and they are on the airport at your direction, therefore you are liable for their actions. All of this is outlined in the 30-page hangar lease you signed. Perhaps you didn’t drive onto the airport in a car, but with a golf cart or some other means of transportation. This falls under liability for operation of “mobile equipment.” The list of exposures that result directly from your actions or the actions of others that are involved in your operation and are out of your control is seemingly endless.
OCTOBER 2019