Aircraft insurance is an inevitable part of owning or operating a private jet. There is no question of whether or not to get aircraft insurance, but rather from whom to get it, how much coverage is necessary, where to find the best rates, and so on, and so on.
The term “aircraft insurance” encompasses a very broad spectrum of insurance options. Most private jet owners will purchase hull insurance, which covers physical damage to the aircraft, including engines, avionics, and all other systems. Private jet owners should also buy liability insurance, which covers legal liability for injury and property damage resulting from the operation of the aircraft. Other common types of coverage include passenger legal liability, passenger and crew personal accident, and third party, cargo legal liability, host liquor liability and other coverages.
Although anyone who owns, or plans to own, a private jet is probably familiar with the basics of hull and liability insurance, the details of such plans are far more complicated than most realize. For example, owners can choose between dozens of types of hull insurance, including “all risk,” “ground only,” and “war risk.” Exact details of coverage included in the policy may change when an owner modifies their aircraft, changes their flight habits, flies overseas or hires a new crew member. Some owners may need to purchase workman’s compensation insurance (depending on the laws of their state), and the variables involved in insurance rates are more numerous than most would like to think about.
The complexity and importance of insuring an aircraft necessitates advice of an industry expert. Jet Advisors has worked with many very good aircraft insurance companies and brokers throughout the industry. There is no one size fits all in risk management. This process is highly individualized and takes into account the owner’s goals and priorities for the risk management process, the specific types of risk he is likely to encounter, and which types of coverage are necessary. The result of each analysis goes far beyond a simple “worst-case scenario” list of all possible ills an owner could encounter – risk management is a collaborative, ongoing process which varies for each owner. A risk management program focused on passenger injury risk will not include all of the same coverage as a program focused on aircraft damage risk.
The advantage of hiring an experienced, honest insurance broker is twofold. As already mentioned, it will result in the best risk management plan for an individual owner, and it will minimize costs. Even when clients of Jet Advisors have been offered low insurance rates by major management companies, a good broker like Terry Miller at Transport Risk Management can actually beat their fleet rate.
With an experienced and trusted broker you can fly with confidence knowing that they have neither over-or under-insured your aircraft. There are a handful of excellent insurance brokers out there but make sure yours has a strong knowledge of markets, rates, and coverage plans and they will be sure to add value.