Aviation Liability Insurance

If you own a plane, you may use it as a means to make money through passenger air service. Whether you run an as-needed or scheduled airline, the proper insurance is necessary before you take to the skies. Commercial airlines work with a variety of different insurance providers, as the risks are too high for a single carrier to manage them.

Private airplane insurance, on the other hand, can typically be handled by a single company. Most of the coverage offered is required by law if you want to be a licensed air carrier, while some coverage types may be optional. Regardless of the type of passenger air service you offer, an independent insurance agent can help you build the right aviation insurance policy. But first, here's more about commercial aviation insurance and why you need it.

What Is Aviation Liability Insurance?

Aviation liability insurance, also called aircraft hull liability insurance, is a special type of business insurance and commercial general liability insurance customized for aircraft. This critical protection includes coverage for physical damage to the plane as well as for owners, passengers, operators, baggage, and cargo on the plane.

Policies also include medical coverage for pilots, crew members, and passengers. Aviation liability insurance also covers expenses related to lawsuits stemming from third-party claims of personal property damage or bodily injury.

Why Do You Need Aviation Liability Insurance?

If you own or rent an aircraft for the purpose of providing passenger air services, you have a number of insurance requirements before you can legally take flight. First and foremost, you must insure against damage to your plane, damage done to third-party property by your plane, and injuries to third parties caused directly or indirectly by your plane.

There are a few aviation insurance companies that carry policy packages specifically designed for those in the aviation business. This is a highly specialized form of insurance, so it's best to work with an independent insurance agent who's well-versed in aviation terminology and exposures and who can help you find the right coverage for your aviation business.

What Does Aviation Insurance Cover?

Aviation insurance packages include several coverage options, many of which are required by law. Coverage includes commercial property insurance for your plane and equipment and aircraft liability insurance, which is required. Be sure to ask your independent insurance agent about these coverages:

Commercial property insurance: This can cover your planes and other business property against theft, vandalism, damage, or destruction due to many types of disasters, including fire.
Hangar and ground support equipment insurance: This is a form of property insurance designed to cover damage to your aircraft hangar as well as the equipment stored inside, such as tools and mobile equipment.
Ground risk hull insurance not in motion: This covers your airplane while it's stationary on the ground against such things as fire, hail, vandalism, and hangar collapse.
Ground risk hull insurance in motion: This insurance covers you against damage to your aircraft while it's in motion but still on the ground, such as while taxiing to the runway or as it is slowing after touching down on the landing strip.
In-flight insurance: This covers damage to your aircraft during all phases of flight and ground operation.
Passenger liability insurance: This covers financial damages if your passengers suffer property damage, injuries, or death due to your flight services. This coverage is typically sold based on the number of passengers on your flight or the number of seats you have on your plane.
Public liability insurance: This covers damage your plane or pilot may cause to the general public, such as if your plane hits a house or collides with another aircraft while taxiing.
Business umbrella insurance: Because the liability costs associated with a plane crash can be astronomical, your policy’s coverage limits may not be high enough to manage your financial damages. This coverage provides excess liability insurance and is available in limit increments of $1 million.
Aviation renters insurance: This covers incidents of property damage to non-owned aircraft, as well as third-party bodily injury or property damage.

An independent insurance agent can help you assemble the right policy from a qualified aviation insurance association. Working with knowledgeable aviation insurance brokers is a great way to get matched to the coverage you need the most.

How Much Does Aviation Insurance Cost?

Insurance rates for business aircraft insurance can vary significantly from one business to the next. Some of the factors that may affect rates can include the following:

Pilot experience: Having pilots with many years of experience with flying in general and with flying your plane specifically may result in significantly lower insurance rates than what you would pay for a novice pilot or one who is inexperienced with your specific planes.
The type of plane you insure: Your insurance company will likely consider the make and model of any planes you use for your business when determining your coverage rates.
How the aircraft are used: How often your aircraft are operated and how exactly they're used, including how far the distances they travel are, can impact your insurance rates.
The passenger capacity of your airplane: While your plane might not always be full, the total number of passengers you can potentially carry may influence your coverage rates.
The deductible amount: As with any insurance policy, a higher deductible often results in a lower premium.
The insurance company you choose: Different insurance companies offer aviation insurance coverage at different rates.

An independent insurance agent can help you find competitively priced aviation liability insurance and other coverages necessary for your aviation business in your area.

An Independent Insurance Agent Can Help You Find the Right Aviation Liability Insurance

Insuring your passenger air carrier business can be a complex endeavor, especially to ensure that you have sufficient aviation liability insurance. An independent insurance agent who is familiar with aviation coverage can greatly help simplify the process. These agents can explain your various coverage options, help you understand your risks and exposures, and shop and compare policies from many different aviation insurance carriers. They'll ultimately get you matched to a policy that offers the best overall blend of coverage and cost.

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