Pilot Liability Insurance Are You Covered?
Pilot and personnel liability is a very wide subject that is difficult to put into a broad brush review of exposures. However, I will make the good attempt.
Let me start with pilots. A pilot who is employed for a flight operation, whether he is a company employee or a contracted pilot for his service is generally covered under an operator's policy. That holds true as long as the flight involved is for the company or their businesses. What I mean is that if the pilot rents the helicopter from the company and then goes out and performs a subsequent commercial use, whether it is flying passengers for hire, sightseeing, power line patrol or any other subsequent use that the pilot makes a charge for would NOT be covered under the policy carried by the company. The use by a renter pilot is restricted to their own personal and business flight. I realize the majority of readers do not routinely rent their ships, but this is an important area if you decide to allow rental. You need to ask and know how the renter pilot will be using the ship. For those operations that are in the business of rental, they should encourage the renter to carry their own renter pilot liability policy. AIU Holdings has a policy available for renters of certain models of helicopters. As I mentioned in an earlier column, it is based on the pilots' individual experience and the limits desired. If you are a Student Pilot o r a transitioning pilot to rotorcraft, the same non-owner liability policy is something you should seriously consider. It will make up for the possible lost sleep in the event of a loss.
Almost all of the insurance policies will include the pilot in any settlement up to the same limit of coverage as shown on the policy. The pilot and pilot are both subject to the limit shown; they do not each have the liability limit applied to each entity. So for instance, if the liability limit on the policy is $1,000,000 each accident with a limit of $100,000 per passenger, if both the operation and the pilot are found to be equally at fault for the loss, the insurance policy would pay the limits as shown one time, not twice. The cost of the defense is usually an extra expense covered by the policy and is not part of the liability limit stated on the declarations page. A pilot flying for the employer for the company's commercial purpose is considered a named insured. The pilot cannot, that I am aware of, obtain additional coverage for his exposure beyond the employers policy.
This takes me to an area that if the pilot himself is injured during a flight, the policy covering the helicopters will usually not cover any injuries sustained by the pilot. The policy is designed to cover passengers and persons and property on the ground or in other vehicles. For coverage protecting the pilot, the employer would turn the claim into their Workers Compensation carrier. A contract pilot may or may not be covered under workers compensation; it depends on how your employer reports your pay to the carrier of the comp policy. He should be including you if you are a regular pilot for the company. A good and thorough agent would want to protect his client by recommending that contract pilots be included.
Let me shift for a moment to pleasure flying. Let us look at the example of someone you know owns a Bell 206 for his personal use. You are flying with him from Baltimore to Philadelphia. Enroute, he says "go ahead and take the controls while I get ready for the approach". As long as the owner is with you and you are just his safety pilot or auto pilot with skin, there is no problem liability wise. The problems come up when you take the ship without the owner onboard. It is then that you need to make sure you are named on the policy as an approved pilot. The companies will all want a detailed pilot history form from you. Once you complete one, keep a copy so the next time you will have it readily available instead of re-creating all of the information. It is also an excellent base point to do an annual update with medical and flight review dates, any schools you completed, when and where, and update your hours. If you keep on top of this form it will not seem like a chore when asked each year for your insurance renewal.
In my next column I will address the exposures of the mechanics and ground crews. If you have any questions about the information I have presented, please contact your own agent so they can provide an answer specifically for your operation.
These articles are purely advisory in nature. Your own certificated flight instructor, the FARs, pilot's operating handbook and various updated transmittals from the FAA or your aircraft manufacturer may alter or affect the information published. Leading Edge Aviation Insurance neither assumes any responsibility for the accuracy of these articles, nor any liability arising out of reliance upon these articles.