As a reminder, in prior months we introduced - ‘PUNC’ (Pilots, Use, Named Insured and Contracts) is an acronym capturing the four most important areas of aviation insurance that result in the largest percentage of claim denials. This month, we review the Named Insured Clause.
The first thing we need to do is define Named Insured. There always seems to be confusion over the difference between a Named Insured and an Additional Insured. Without going into a great amount of detail, the Named Insured is the owner of the policy. They are entitled to all coverage, have the right to cancel, add or change coverage, and the right and responsibility to coordinate with the insurer on any claim, receive claim checks, return premium checks and cancellation notices. An Additional Insured on the other hand, simply shares certain parts of your liability coverage, and does not have any other rights under the policy.
Many owners make the mistake of simply listing the registered owner (often a sole-asset LLC) as the only "named insured" and don’t also list the true operating company or principal owner. If this applies to you, and your policy doesn’t already have it, add the Broad Form Named Insured clause if available. For details on how this clause should read, contact your broker.
Properly structuring the named insured is crucial because the entities or persons who truly need the protection may not have it if the policy isn't written properly. Why? Because many of the ancillary coverages, including the use of non-owned aircraft, apply only to the Named Insured.
You might think you needn't worry about that if something were to happen and a lawsuit followed. Keep in mind that one of the great benefits of your liability policy is that it provides an attorney to defend you, even against a suit that is groundless.
Because the wording of aviation insurance policies is unique from one aviation insurance company to the next, it is critical you review your unique risk profile in depth with your AssuredPartners Aerospace insurance broker so they can help you properly structure your policy’s named insured clause before a loss.Next month we’ll address the “C” in PUNC. Want to know more? Email us, call 800.622.2672, or visit our website.