The question no one can answer - until after an accident! As an aircraft owner, look at liability insurance as your lawsuit protection for bodily injury or property damage that results from your negligence. After an accident, you would find out if you purchased an adequate liability limit once it is determined how many people in the aircraft were injured, and how many outside. Were they high net worth individuals? How much property damage was there?
Let’s look at a loss to illustrate. Consider the accident involving a Piper Lance that hit the runway end lights on an instrument approach shearing the right gear and causing the aircraft to skid off the runway landing upside down. The 4 passengers all got out before the aircraft was engulfed in flames. Miraculously, there were no fatalities.
For purposes of this discussion, let’s assume the above accident was “the nightmare loss” and all passengers and crew perished. The lawsuits brought on behalf of the passengers by their families will come fast and furious. Since roughly 85% of accidents are caused by pilot error, the most probable target will be the owner. When it gets to court the potential amount of economic and non-economic damages to be awarded by a “jury of your peers” for a wrongful death claim will be determined. First what the economic value of that person’s life is to their family calculated by taking the individuals age at the time of death, their probable retirement age, the amount of money they made annually, adjusted for potential career moves up the ladder, (think rising star) and arrive at a total sum. Then they will consider non-economic value, such as loss of consortium, etc. and arrive at a dollar figure for what that is worth. You can quickly see that for each passenger, the amount of the potential verdict could become alarmingly large.
In a word, liability insurance is your biggest friend. Coverage limits available for piston aircraft from $1M per occurrence (with passenger bodily injury liability limited to $100K each passenger) up to $2M can easily be purchased and even higher limits while more difficult to secure, may be possible via an excess policy. The cost difference to increase your liability coverage limit is worth serious consideration. You honestly need the highest liability limit you can reasonably afford. Verdicts are not getting smaller, only increasing every year. Sure, the odds of the above loss happening to you are small, but that’s what the owners of that aircraft thought too. Mistakes happen and we never know when our number will be called. Is your protection sufficient? Better look again if you are in doubt.
Watch for the next article on this important topic in October! In the meantime, contact your AssuredPartners Aerospace broker , visit us at ap-aerospace.com/own or give us a call 800.622.2672. We will help you navigate the aviation insurance market!