We all want lower insurance rates. The best route to getting a lower rate for your school is through a loss prevention program. Organized correctly and efficiently, a loss prevention program is one of the most effective ways to protect your business and minimize your operating costs.
Holding regular safety meetings with your CFIs is one of the most important methods of any highly effective safety program. Discuss specific safety concerns, share incidents (without threats of repercussions), and review ways that CFIs can reduce risks with students. This is also a good time to review recent decisions, issues, and incidents from the NTSB accident database.
Whether your flight training operation is a large school with many locations or a small, one-man endeavor, here are some tips to help you implement a safe and loss-free training operation.
- Renter’s insurance (nonowned aircraft insurance)—You should require proof of renter's insurance before you allow open rental of any aircraft. At a minimum, renter’s insurance should pay for damages that the flight school’s policy doesn’t cover, such as deductibles, diminution of value, and loss of use. Consult your attorney or AOPA’s Legal Service Plan to make sure the policy covers all vital points.
- Rental agreement—Be sure your rental agreement requires the renter to pay for all damage to the aircraft, missing or stolen equipment, loss of use, diminution of value, legal fees, and any costs associated with returning the damaged aircraft to the flight school.
- Retractable-gear aircraft—Equip aircraft with appropriate checklists and remind all renters and CFIs to use them for every stage of flight. Ensure the preflight checklist includes verifying that any automatic gear extension or gear warning devices are properly engaged. If one is not already installed, consider adding a voice annunciator device, which costs less than the deductible you would pay in the event of a gear-up landing.
- Multiengine proficiency checks—Renters of multiengine aircraft and CFIs should practice and be able to pass the multiengine PTS every six months to ensure continued proficiency. Also, instrument-rated pilots should be able to fly an entire published approach on a single engine.
- High-performance aircraft—Since most renters won’t fly often enough to maintain currency in a high-performance aircraft, establish strict requirements of diligence and/or dual instruction. Generally, any pilot logging fewer than five hours in complex/high-performance aircraft in the last 45 days should be expected to complete a checkout with an instructor prior to rental.
- Crosswind landings—Students should be familiar with the side-slip, or “wing low,” crosswind technique and be able to transition from a crab to a side-slip as they approach the runway. The highest numbers of losses happen during landings, and particular crosswind landings.
- Hard landings—Training aircraft often suffer hard landings or prop strikes, resulting in a high number of claims. Be sure your CFIs are teaching proper landing techniques, which you can verify with ride-alongs and staff training.
Clarify with your insurance carrier to understand how your CFIs are covered with the policy. There’s an important and limiting distinction between “named insured” and “named pilot.” If a CFI is added to your insurance policy as a named pilot, it’s possible the insurance company will only cover the flight school in the event of a claim, and then subrogate against the CFI. Be up front with your instructors and make sure they understand the risks.
If you are an independent CFI you should carry coverage on yourself, as many aircraft ownership policies won’t cover you in the event of a loss. Also, flight schools that employ independent contractor CFIs may not have coverage to protect the instructor from liability in the event of an accident.
Be transparent with your flight instructors and customers to avoid problems in the future. If everyone is aware of the risks, future claims will be handled much more easily.