It appears the world of insurance for flight training operators is hovering along well.  Several contacts I have made seem to substantiate this feeling of well being.  Is this what you are feeling as well? 

The world of helicopter flight training, as I am sure you know, covers a vast spectrum.  The training facilities also have wide ranging insurance needs and wants.  Many report the market is able to provide the coverage that they desire.  Several are consumed solely with flight training activities.  One of the highlights I found consistently was the ability to work with their agent who understands the operation from the check-in of the students through the training activities and the maintenance operations.  In fact, a long term relationship with your agent as well as a better than average loss ratio may give you a good bargaining position.  Operations that have a dedicated safety program that includes more recurrent training than the FAA and/or manufacturer requires has reduced many losses.  Internal training of the instructors on a more frequent basis has worked for some operations.  Coupled with a service department who really understands your ship can spot areas to keep ahead of normal repair cycles.  Preventive maintenance or doing a routine inspection earlier than scheduled can be seen as an unnecessary expense, but in the long term, it can very possibly save money.  If the school does not have their own maintenance shop, it is important that the outside repair facility is just as competent with the thoroughness of the inspections to impeccable records. 

The current financial market can cause a fluctuation in a schools’ activity.  I contacted several operators who reported their classes are full and classes are full into the Spring.

 I know the fuel prices made the management of large fleets a challenge that still continues – But I hear it is improving… a little. 

Let me cover the basics of insurance that should be addressed or at least that you should be aware of.  The primary policy you need is the liability and hull coverage.  The liability protects you and you’re CFI’s while flying your helicopter.  It includes damage to persons and property on the ground as well as any passenger coverage up to the limits of the coverage purchased.  This would not cover the employees themselves as they should be covered under a workers’ compensation policy for injuries suffered during the job.  The liability limits should be set by considering the value of your operation and the area over which you operate.  A training operation that flies over deserts and swamps does not need the same coverage as those who fly in and out of densely populated area.  Limits should also be with the consultation of your attorney.  I am sure he would tell you that several hundred million would suffice, but realistically, those limits are not available. 

The hull portion covers damage to the ship itself, but will not cover damage which you would expect or intend.  So pushing the oldest bird out of the hangar into the teeth of an approaching hail storm will not get it replaced – Sorry.  This coverage is the area where the most can be done to reduce losses depending on you own loss record and safety programs.  Good cockpit resource management course with training, training and more training is the best way to get results.  Being an old CFI, I know we can feel like “Didn’t we just do this?”  But experience has shown how we have a memory that needs constant reinforcement so that we automatically react even before the brain has had a chance to process the oncoming situation that requires some action by you.

The next area is for the Students.  The renter pilot/student is not covered under the flight schools policy for liability or damage to your ship that is a result of their negligence.  Sorry ladies and gentlemen.  The two companies who used to offer this protection have been reduced to one, and that program is only for the R-22 and Hughes/Schweizer 269/300.  AIG Aviation will quote non-owner protection on an individual basis after getting full underwriting information.  The word from my source says “it is available, but it is not cheap.”  Historically, only a few pilots actually purchase the coverage.  The entire premise of insurance is insuring many people and then paying losses for the few.  It seems in the non-owner world, those who purchased the coverage had more losses than was anticipated.  I would say that if you have concerns, you should contact your agent to discuss ways to provide the non-owner protection for a higher percentage of your student.  See if you can work a program with your agent where this coverage is included in your Private Pilot/Rotor package course.  It is possible that with more pilots operating safely, these rates may also come down.  Not a guarantee, but it is possible.  Insurance companies, unfortunately, mainly look at the amount received vs. the amount paid on claims in this area.

If you operate a maintenance facility that works on helos that are not part of your operation, you should be concerned with liability for damage to the ships in your care, custody and control.  For instance, when you remove the rotors, what if that should fall off the winch and fall on the ship?  Do you have Hangarkeepers liability coverage?  And if you do any test flights before or after maintenance, In-Flight Hangarkeepers liability is an excellent idea.  It is not inexpensive, but paying for one loss would make that cost feel like a great value.  Almost all pleasure & business policies that your customer carries have wording that excludes coverage for the repair facility during maintenance flights.  If there is damage during a flight, I have been told that they will pay for the loss to protect the owner of the helicopter, but will subrogate back to the shop for reimbursement.

I have touched on the basics of what I have seen in this market place.  If it has generated questions, be sure to contact your agent.  He or she can provide answers that fit your operation.

Jeff Fleming brings 30 years of experience to our agency.  Before the insurance business, Jeff attended Florida Institute of Technology in the 1970’s, graduating with honors with a Bachelor of Science in Air Commerce degree.