Pilot Liability -- Are you Covered when it comes to Aviation Insurance?

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 or her service -- is generally covered under an operator's insurance policy. That holds true as long as the flight involved is for the company or its businesses. In other words, if the pilot rents a helicopter from a company and then goes out and performs a subsequent commercial operation -- flying passengers for hire, sightseeing, power line patrol or any other subsequent use that the pilot makes a charge for -- this 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. It is imperative that you find out how the renter pilot will be using your ship. For those operations that are in the business of rental, it is important that they should encourage the renter to carry their own renter pilot liability policy. Most aviation insurance companies have a policy available for renters of certain helicopters models. As I mentioned in an earlier column, these insurance policies are based on a pilot's individual experience and the limits desired. If you are a Student Pilot or a transitioning pilot to rotorcraft, the same non-owner liability policy is something you should seriously consider.

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 insurance company are both subject to the limit shown; they do not each have the liability limit applied to each entity. So let's assume, for instance, 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 only 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 obtain additional coverage for his or her exposure beyond the employer's policy.

This takes me to another sticky area. If the pilot is injured during a flight, the policy covering the helicopter will usually not cover any injuries sustained by the pilot. The policy is designed to cover passengers and persons/property on the ground or in other aircraft. 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 the pilot's pay to the carrier of the compensation policy. The policy should include the pilot if he or she is a regular pilot for the company. A good and thorough agent would want to protect the 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 owning a Bell 206 for his or her personal use. You are flying with this individual from Baltimore to Philadelphia. Enroot, he or she 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 or her 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.

Most aviation insurance 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.