Aviation Accident & Air Craft Insurance: When Do You Need It? (2024)

Aviation Insurance also referred to as Aircraft Insurance, is a type of liability insurance required for aircraft. This insurance covers different types of planes including standard aircraft, experimental, vintage, and seaplanes. While Aircraft Insurance covers the cost of repairs or replacement for damaged airplanes, it is also important to carry Aviation Accident Insurance.

In this article, we will go over the basics of Aircraft Insurance and Aviation Accident Insurance and why it is important to have it.

Any person or organization that owns an airplane needs Aircraft Insurance. This insurance is important because airplanes typically fall out of the range of coverage that comes with a Commercial or Personal General Liability Policy.

In fact, commercial airplanes specifically benefit from Aircraft Accident Insurance. According to Trusted Choice Insurance, the top causes of fatal commercial airplane accidents are:

• 54% pilot error.
• 24% mechanical failure.
• 9% sabotage.
• 8% weather-related.

Aircraft Insurance provides coverage for any damage to an airplane that arises from general use, ownership, and regular maintenance of the plane. It is important to choose an Aircraft Liability Insurance Policy depending on your specific needs and uses for the coverage because policies vary widely. Some common coverage options as outlined by Lloyd’s, the world’s insurance marketplace, include:

• Aircraft hull and aircraft liability:Provides coverage for physical damage to the body of the plane. In this coverage, various perils are covered including war and terrorism.
• Aviation liability:Covers legal liabilities associated with airports and aviation operations. This excludes aircraft operations.
• Aviation products liability: Provides coverage for parts used in an airplane. For example, engine, avionic software, or navigation software.
• Aviation cargo coverage:Provides coverage for cargo in transit on the aircraft and up to 60 days in storage.
• Aircraft crew personal accident coverage:Coverage for the event of death or injury to a crew member.

According to Investopedia, sometimes Aircraft Liability Insurance comes with other policies like“Aircraft products liability, airport liability, land-based general liability and hangar keeper’s liability coverage.”Not everybody needs these added coverage options, so make sure you know what is a part of your policy and what is not.

Depending on what an airplane is used for, there are some other important coverages to look for in a policy.

• Coverage for passenger items.
• Liability indemnification for the storage hangar.
• Injury from operating the aircraft.
• Emergency landing costs.
• Search and rescue operations.

Because there are so many types of airplanes, no single policy will work for everybody. Coverage prices vary depending on the type of plane. When searching for a policy, owners need to understand different elements that go into this insurance to find the right policy.

In this scenario, while Aircraft Insurance typically covers repair or replacement of damaged aircraft and parts, aviation accident insurance will cover liability claims from injury or loss of life.

Aviation Accident Insurance provides coverage for aircraft accidents. This coverage falls under Accidental Death and Dismemberment (AD&D) Insurance and it covers Pilots, Crew Members, and passengers in an accident. The chance of sustaining an injury on an airplane is extremely low for both passengers and crew, so demand for this coverage is minimal. Although only a handful of insurers offer this coverage, it is still important to understand how it works.

When it comes to individual life insurance policies, sometimes accidents sustained on an aircraft are not part of the coverage. This all depends on your coverage and the type of aircraft you are on. For example, this exclusion usually only applies to small non-commercial aircraft. If you are on a commercial flight and you sustain an injury, your life insurance will still kick in.

Another option for Aviation Accident Insurance is for companies. If an organization has employees who travel for work often, this coverage is important to have. An employee or beneficiaries can receive coverage from this policy in the case of injury or death on an airplane for work.

It is important to note that this coverage differs from that used by airlines for their crew and employees.

There are a lot of factors related to Aviation Insurance that make it hard to determine the need and type of coverage.

Companies with employees that travel for work need to ensure some form of Aviation Accident Insurance.

For personal use, anybody looking into any form of Aviation Insurance should consult with an Insurance Agent or Broker to determine what coverage they need and how they should tailor a policy to their specific needs.

Consider that Aircraft Insurance may not be required by state or federal entities. In this case, a basic policy can protect you and your aircraft from the financial consequence of aviation accidents or other types of damage. This policy includes weather-related damage, vandalism, or property damage as well as any damage or accidents that may occur while you are in flight or on the ground.

In conclusion, a good Aircraft Insurance Policy will provide minimum basic liability insurance with the option to customize your policy based on your needs, budget, and any relevant circ*mstances or coverage requirements you may have.

For more information on business insurance and Risk Management, check out our blog.