Aircraft Liability Insurance

What's on this Page

• Non-Standard Policies
• Additional Insured Endorsements
• No Contractual Liability Insurance
• Certificates of Insurance
• Limits

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Read next: Risk Management Procedures: Background & Rationale

Non-Standard Policies

• ISO does not issue standard aircraft liability policies.
• Each aviation insurer has its own wording; exclusions and definitions are not exactly the same for all insurers.

Additional Insured Endorsements

• Primary: some additional insured endorsements state specifically that coverage for the additional insured is primary and non-contributory.  This is preferred.
• Excess: this is not acceptable because the aircraft owner’s policy will not protect us until the limits of our airport liability policy are exhausted.
• Silent: additional insured status is presumed to be primary because coverage for owned aircraft is primary.

No Contractual Liability Insurance

• Our agreements with aircraft owners always require them to indemnify us. 
• Most aircraft liability policies do not have contractual liability insurance, which means that the aircraft owners have to fund the indemnification obligation from their own resources. (Fat chance!)
• If the aircraft liability policy provides us with additional insured status on a primary and non-contributory basis the indemnification obligation is funded, at least to the limits of the policy.
• The GL has contractual liability coverage for aircraft (PDF: 53 kB).  Although the GL excludes direct coverage for ownership, maintenance and use of aircraft and watercraft, it does cover contractual liability insurance for aircraft and watercraft.  This is a moot point for airport month-to-month tenants because we do not require them to have GL. 

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Certificates of Insurance

• Issued by insurer: the insurer is bound by the certificate. 
• Issued by Aviation Manager that has the pen for the insurer: the insurer is bound by the certificate
• Issued by the broker: the insurer is not bound by the certificate and could deny additional insured status it were not actually endorsed on the policy.  Because of increased extra work for the Airport team to get copies of the additional insured endorsements or certificates issued by the insurer or Aviation Manager, we accept broker-issued certificates without copies of the additional insured endorsement.

Limits

• Occurrence Limit: the most the insurer will pay for any one accident.  This includes property damage and bodily injury to passengers and non-passengers.
• Passenger Sublimit: the most the insurer will pay for injury to any one passenger.  This is included in the occurrence limit; it is not an additional amount of coverage.
• Smooth Limits: no limitation on how much can be paid for injury to any one passenger.  The entire occurrence limit can be used for the injury to a passenger. Payments for passenger injuries reduce the occurrence limit; they are not additional limits.

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