Think before loaning your aircraft

June 20, 2025

Loaning your aircraft to a friend, colleague, or fellow pilot might seem like a kind gesture—but it’s one that carries serious liability and insurance implications.

Before you hand over the keys, it's important to understand the potential risks and what steps you can take to protect yourself.

Vicarious liability: Risk without control

Even if you’re not in the cockpit, you could still be on the hook. In some states, aircraft owners can be held vicariously liable for accidents involving their aircraft—even when someone else is flying. If the borrower is involved in an incident, you could be responsible for the resulting damages, regardless of your direct involvement.

Don't assume you're covered

Loaning your aircraft may create coverage gaps if not handled properly. Consider the following:

Pilot requirements: Ensure the borrower meets the qualifications outlined in your policy.
Usage limits: If any form of reimbursement is involved, confirm that it's within the limits permitted by your insurance policy’s usage clause.
Liability coverage: Verify that the borrower has sufficient non-owned aircraft liability insurance or ask your broker about adding them to your policy as an additional insured or securing a waiver of subrogation.

Failing to address these details could leave you exposed to claims that your policy won’t cover.

Put it in writing

A formal agreement can be one of your best defenses. Your contract should clearly outline:

Responsibilities and costs
Insurance requirements and proof of coverage
Operational procedures and expectations
Indemnification clauses, especially for incidents that could reduce the value of your aircraft after a loss (diminution of value)

This type of agreement can help ensure accountability and provide legal protection if issues arise.

A thoughtful risk, not a casual favor

While loaning your aircraft may feel like a simple favor, it introduces serious liability considerations. Taking the right precautions—through insurance, contracts, and expert advice—can help you make a more informed and secure decision.

Before you loan your aircraft, speak with an aviation insurance specialist who understands the complexities of aircraft ownership. At AssuredPartners Aerospace, we’re here to guide you through every angle of the decision and help you protect your aircraft, your finances, and your peace of mind. Call (800) 622-2672 today to speak with one of our experts or visit www.assuredpartners.com/aviators today to learn more. We look forward to serving all your aviation insurance needs.

Topics: Insurance, Ownership, Insurance

AssuredPartners Aerospace

As AOPA’s strategic partner for aviation insurance, AssuredPartners Aerospace, one of the nation’s largest aviation insurance firms, provides the absolute best insurance protection to fit your needs. Whether you’re flying your own airplane, renting, instructing, or running an aviation business, we have an unmatched depth of knowledge and resources driven by the desire to set a new standard for service and responsiveness. With more than 25 years’ experience serving pilots’ aviation insurance needs, our expertise has been developed over years of working closely with the nation’s best insurance carriers. We understand the exposures that make aviation insurance unique.

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