Aircraft Insurance PolicyLuckily, aircraft policies are pretty self-explanatory. There are two main sections of coverage: hull and liability.
Hull coverage is for physical damage to your aircraft, either in motion or not, subject a deductible. This is also the optional coverage on an aircraft policy as it’s not required to fly legally. Choosing not to carry hull coverage is usually referred to as self-insuring the value of your aircraft.
Liability is the second main coverage and unlike the liability coverages on a AGL policy, Aircraft Liability also extends to protect you for passenger injury in addition to third party property damage resulting from the operation of your aircraft.
There are a host of additional coverages that can be included in a policy wording, including coverage for handheld equipment, flying clothes, medical expenses, and emergency costs like fire fighting or runway foaming.
If you don’t own an aircraft but still rent or borrow an aircraft to fly regularly you may want a Non-Owned Aircraft Hull and Liability policy. These are mostly the same as a normal aircraft insurance policy as far as coverages go, except it specifically covers you for other people’s aircraft.
All aircraft policies also have the option to add Premises Liability (see above) if it’s not automatically included in the wording. This is so aircraft owners don’t have to buy a second policy to cover potential bodily or property damage while on an airport. For hangar owners who also one an aircraft in the same legal name, this coverage will also extend to their hangar ownership. If your airport requests to be added to your aircraft insurance policy, Premises Liability may be most likely what they are asking to be listed as Additional Insured on.
Property Insurance PoliciesProperty insurance is not an aviation insurance policy but rather a commercial policy and provides coverage for property you own such as your hangar or building, equipment, tools, or stock.
Since this is a non-aviation policy it will almost certainly contain exclusions for aviation and aviation related activities. The most common exclusions are for aircraft (and their parts), damage from parts falling from aircraft (yes, really), and any claims resulting from aviation operations (including falling parts again).
Even with the exclusions, which can often result in policy holders paying for insurance that’s functionally useless, the biggest problem with property insurance is that most insurers simply just decline to every quote aviation companies and hangar owners. Aviation is known within the insurance industry as being “high-risk” and most insurers have treaties with government restrictions which prevents them from writing aviation related risks of any kind.
I may be able to obtain a quote for a fleet of helicopters without an issue, but sometimes insuring a $40,000 hangar can be almost impossible!
There are a few insurance companies who do understand or specialize in high-risk exposures like aviation who will write hangars or policies for buildings occupied by business involved in aviation. These tend to include endorsements eliminating the aviation exclusions or wordings that specifically don’t mention aviation in their exclusions. Unfortunately, these companies can often be more expensive.
All this is to say, if you have a property insurance policy for your business or hangar, my advice is KEEP IT!
Conclusion One of my favourite sayings is that “all of us in the aviation industry have a higher duty of care”. Part of that, in my opinion, is ensuring the financial security of everyone by carrying adequate insurance.
Ultimately, it is up to you to decide where, if, and how much coverage you carry.
I always suggest that everyone in the aviation industry consult with an AVIATION insurance broker. That is someone who specializes in aviation, all aspects of aviation, whose customers are all aviation related. We may be hard to find, and we may not be close by but we do exist and can be tracked down.
Sandy Odebunmi has been an aviation insurance broker for over 30 years during which time she has specialized in General Aviation and creating affordable solutions for her clients and aviation associations across Canada. She is now the Vice President of Aviation at Sound Insurance Services in Toronto and can be reached at 416-642-6360 or sandyo@soundinsurance.ca.