Liability Coverage On Aviation Insurance?
Aviation insurance offers coverage for aircraft operation, including drones, and the dangers involved in aviation. Liability insurance of this type ensures the aircraft's owner against financial losses. The owner or policyholder might be liable to pay damages brought about by injuries to individuals or property caused by or in the aircraft's operation.
The most popular type of aviation liability insurance is often referred to as third-party liability insurance. It ensures aircraft owners for risks and damages their aircraft have done to people and their property. Insured or covered events include malfunction of the drone in mid-flight, crashes to an individual's home, vehicle, farm crops, airport buildings or facilities, or another aircraft.
However, this type of aviation insurance doesn't cover damages to the insured owner's aircraft itself, nor does it give coverage to passengers or cargoes being transported on the same aircraft. There's another type of insurance policy that covers those risks. It's called hull insurance or in-flight insurance. It offers coverage for damages done to the owner's aircraft. As for the risks that result from passenger injuries, passenger liability insurance could answer that. It specifically covers damages due to injuries sustained by the passengers while riding in the aircraft. Many countries already require passenger liability coverage for commercial or large aircraft. Damage to cargoes and equipment is handled by payload insurance.
Why Get Aviation Liability Insurance?
For anyone who possesses, leases, or commands an aircraft, including a drone, getting aviation insurance is a smart idea.
Here are sound reasons why it's necessary to have aviation liability insurance:
Aviation Insurance Premiums
Aircraft liability insurance has been rather inexpensive. And you can decrease the cost much more when you buy one with liability coverage. But should you decide to buy the aircraft liability insurance alone, the cost of premiums will be a bit higher, but not too prohibitive. Still, if you want to lower your premium cost, you may want to buy less coverage.
Coverage for Damage Expenses And Legal Defense
For example, let's say that your aircraft has encountered an accident that resulted in deaths or injury to others and damaged properties belonging to someone else. In that case, you can expect a legal claim filed against you or anyone else who might be liable. To legally defend your side, you might spend millions, depending on the degree of injuries and damage the accident has brought upon you.
You can't simply ignore the fact of not having an aviation insurance coverage. Without buying one, you, as the aircraft owner, would be liable for all the defence costs on top of the damage costs should the court does not rule in your favour.
Conditional Requirements By Country for Aviation Insurance
If you are already a licensed air carrier, you know that most aviation liability coverage is needed by law, while other coverage types are optional. In some countries, insurance coverage of this kind is not required. However, you still make contractual arrangements with your contractors, subcontractors, business partners and inventors, who may require proof of insurance before doing business with you.
As a matter of fact, if you have an aircraft or rent one to provide air services to passengers, you must comply with various insurance requirements first before being able to operate the aircraft legally. You need to ensure that you have aviation insurance coverage against damage to your plane and equipment, injuries to third-party individuals and damage to third-party property by your plane.
Price of Insurance Depends on Your Experience and Record
The cost of aviation liability insurance would depend on the package you need, how long your experience is, and the details of your operation. These are the factors that your insurance broker will need to determine the costing:
- Deductible amount: The higher the deductible means decreased in premium cost
- Pilot experience: If experienced pilots get to fly your aircraft, it means you'd pay lower insurance prices than you would with amateur pilots. It would help if you had a licensed drone pilot with a flight record of at least 50 hours of flying time in flying drones.
- The aircraft: The aircraft type is one of the determining factors of the cost of aviation insurance. Aircrafts such as drones, turboprops and jets have different insurance costs. The insurance broker may want to know where the plane's operations will be, its purpose, whether it be a cargo or a passenger carrier plane, the frequency of its flight, its age, size, purchase cost, and current value.
- Passenger and cargo capacity: Another factor that will affect your coverage's cost is the number of passengers or the value of the cargo the aircraft is going to carry.
Aviation liability exposure
One of the risks to any business related to aviation is aviation liability exposure. Millions of dollars and beyond were reported to be the losses resulting from the said liability, and third-party aviation liability losses are not included from the standard liability policy.
Aviation liability insurance coverage is mandatory.
While aviation insurance coverage is mandatory, it still varies. We can formulate plans to address these aviation business exposures that might arise, regardless of the business size. There are two main areas of aviation liability insurance coverage: public liability and passenger liability.
Areas of aviation coverage
- Public liability – this liability covers the aircraft owners for damages that their aircraft may inflict to third-party properties in the airport, such as buildings, equipment, crops or ground properties, and damage to other aircraft through collision.
- Passenger liability – this protects passengers who were injured or even killed while in the aircraft. There are minimum requirements in place by Transport Canada for private and commercial operators, with states the specific limit for the individual passenger seat.
- Combined single limit – this coverage combines public and passenger liability into a single limit per accident. Aviation insurance coverage of this type allows for more flexibility in processing passenger claims without setting a limit on each passenger seat
- Premises liability- this protects an individual who works and operates at an airport, airfield or in any landing strip.
- Products liability – this provides coverage for the manufacturers, fuelers and refuellers, maintenance, repair or overhaul operators from product liability losses suffered by third-parties as a result of their work.
Canadian Aviation Insurance for pilots, owners and businesses.
The aviation industry in Canada can be very complicated. Nevertheless, it is always essential to work with an aviation insurance broker who can help you find the perfect aircraft insurance for you.