Let’s face it—insurance can be complicated and hard to understand, but it doesn’t have to be! For the first post in our Aviation Insurance 101 series, here’s a breakdown of 18 common terms that you may encounter in your search for aviation insurance coverage.
Additional Insured (AI):
A person or entity, other than the policyholder, who is covered under the liability provisions of the policy. Being added as a Named Pilot should not be confused with being named as an Additional Insured.
Aircraft Liability Coverage:
This is a major component to an aircraft policy. Liability covers bodily injury and property damage for which the insured is legally liable.
Aircraft Physical / Hull Damage Coverage:
This is a major component of an aircraft policy. Hull insurance provides payment towards the cost of repairing or replacing the insured aircraft which has been damaged or is a total loss.
Commercial Flying Operations:
Utilization of the aircraft where the operator has been hired by a third party for financial gain, which includes, but is not limited to: Charter / P135, Instruction & Rental (I&R), Aerial Photography, Banner Towing, Ash Dispersal, and Parachuting.
Commercial General Liability (CGL):
Applies to aviation related businesses that provide aviation related services which include but not limited to: FBOs, Fueling, Repair & Services, Aircraft Detailing, Custom Interiors, Avionics Installation, Hangar owners. There are 3 major types of coverage which can be purchased on their own or all together are: Premises, Products & Completed Operations, and Hangarkeepers.
Guest Voluntary Settlement Coverage:
This coverage allows you to make an offer of settlement to passengers who suffer certain injury, without admitting liability, and in return for a release from further liability.
Industrial Aid (IA):
Corporate or Individually owned aircraft piloted by professional pilots employed for primary purpose of operating the aircraft for transportation of aircraft owner and guests for non-commercial use.
Medical Payments Coverage:
Usually pays for medical, surgical, x-ray, dental, and funeral expenses suffered by the pilot and/or passengers. This is typically a small limit meant to take care of minor injuries and is available without respect to liability.
Municipal Entity / Public Entity:
Aircraft, including drones, operated by governmental entities.
Named Insured (NI):
This is the actual policyholder(s) specifically named on the policy. Named insured have the authority to make changes to or cancel a policy, and is responsible for premium payments.
Named Pilot(s):
Specifically Named & Approved to fly the aircraft listed on the insurance policy. There may or may not be any Dual, Solo, or Annual requirements for this pilot. The requirements would specifically be listed next to the Pilot’s name.
Non-Owned / Renter's Insurance:
Insurance coverage for a pilot who is flying aircraft they do not own in whole or in part. Both liability and hull coverages are available.
Open Pilot Warranty (OPW):
A clause in the insurance policy that lays out the minimum requirements for pilots who may fly the aircraft. Pilots specifically named do NOT have to fit these requirements.
Pleasure and Business (P&B):
P&B (which is also sometimes referred to as “Non-Commercial Use”) means Private Pleasure & Business use, excluding any use for hire, money, or any form of reward or compensation.
"Smooth" Limit (CSL):
This limit of liability coverage offers a single amount to cover bodily injury and property damage, without limiting the passengers. The insurance policy describes this coverage as Combined Single Limit (CSL).
Sub Limits:
This limit of liability coverage offers a single amount to cover bodily injury and property damage but limits the amount passengers can claim.
Subrogation:
A legal doctrine under which your insurance company attempts, in your name, to recover money it has paid under your policy.
Waiver of Subrogation (WOS):
Prohibits the insurance company from attempting to seek restitution from a third party who causes any kind of loss to the insured.
Are there additional terms that you’ve come across? Let us know in the comments, or reach out and drop us a line via email. And remember—if you’re looking for insurance coverage for your aircraft, aviation company, property, or more, ZANETTE Aviation can help. Use our online quote forms to learn more about coverage for your single or multi-engine aircraft, turbine engine aircraft, helicopter, or drone/UAV, as well as for commercial general liability or commercial property.
Joe Zanette is an Insurance Broker with ZANETTE Aviation Insurance Service, Inc. His specialties include complex risk, autonomous vehicles, and commercial policies. Contact him for an insurance quote, or follow him on LinkedIn.
ZANETTE Aviation Insurance Service, Inc. brings decades of experience placing policies for our clients with the top-rated aviation insurance companies in the business. To learn more about our services, contact us at (650) 593-3030 or send us a message.