Tie down rental agreement

StinkBug

StinkBug

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In preparation for the purchase of my new (to me) aircraft I have been investigating where to keep it. I got a copy of the tie down rental agreement from the FBO at my local field and they are asking for a $5mil liability insurance policy with them named as also insured. Every insurance quote I have gotten so far has had a $1mil limit, and to me $5mil seems REALLY high to insure a parking space. Is this normal, or is this FBO a bit on the crazy side? They are the biggest one on the field, with by far the most planes in their tie down area, but I cant imagine they all have that much coverage since most are older 172's and 150's. What kinda stipulations do you guys have in your contracts?
 
1 mil is standard....I think you need to talk to them.
 
It is most definitely not normal, and if they insist on it, they won't have any tenants since a $5M liability policy is well nigh impossible to obtain. That said, you might see how the existing tenants are handling it.
 
Quite a difference from airport owner who asked....." Are you insured? Hull, liability?"
When I answered to the affirmative , I was told, "great! " no other conversation. ( this was for a hangar)
 
The other thing that will suck is that they want to be named insured on your policy. That is likely going to raise your premium.
 
Check and see...Named Insured and Additional Insured are two very different things you could probably not afford for them to be a Named Insured and I doubt you could get a company to do it....
 
Warlock said:
Check and see...Named Insured and Additional Insured are two very different things you could probably not afford for them to be a Named Insured and I doubt you could get a company to do it....
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No reason to add them as named insured... They ain't gonna be flying the plane...:no::no::no:..

Also to the OP.....

Ask to see their 5 million dollar policy,,, And don't be shocked if they only produce a 1 mil policy...:rolleyes:
 
I can understand the requirement for a liability policy. But naming them on the policy I don't understand. And $5m with them named is pure crazy.
Our airport "requires" $1m liability. But they actually want to see some sort of liability policy, and you can get by with $500k. But $1m seems to be the norm these days, so just get it and go with it.
 
Warlock said:
Check and see...Named Insured and Additional Insured are two very different things you could probably not afford for them to be a Named Insured and I doubt you could get a company to do it....
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True, but even additional insured will cost you.
 
bluerooster said:
I can understand the requirement for a liability policy. But naming them on the policy I don't understand.
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They probably want 'additional insured'.....so if the FBO tug runs into your airplane, your policy covers the damage, not theirs.

Landmark here at ORF has such a requirement.
 
Never have seen a requirement that you have 5 mil liability. Also naming them as insured under your policy doesn't make much sence,as they are not flying the aircraft.
 
I know of at least 2 airports that require being named on the insurance plan for their "hangars". Both are county owned.
 
Fearless Tower said:
They probably want 'additional insured'.....so if the FBO tug runs into your airplane, your policy covers the damage, not theirs.

Landmark here at ORF has such a requirement.
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No, that is not the way it works.
Additional insured is standard. If you screw up and hurt someone or something, that person can sue you and often anyone touching you is also named, the company that leased you space. People are looking for all the deep pockets they can sue.

But if the FBO or airport maintenance damages your airplane due to their negligence, they are not covered under your policy. They have to have their own coverage for that.

Standard around here is $1M. The county airport commission tried to get $2M until it was explained to them by insurance companies that they would not issue a $2M policy to the typical GA pilot flying a spam can.
 
BillTIZ said:
Additional insured is standard.
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No. Naming the FBO as additional insured on the policy is hardly standard.

I've leased tiedowns and hangars at just a few airports around the country and when Landmark insisted on additional insured it was the first. While not unheard of, my broker thought it was ridiculous as well.
 
I lease mine from the State of Alaska. The only requirement is a current medical.
 
Maybe I worded it wrong. They want to be named for the liability portion of the insurance, not the PIC part. Like someone said it's more to prevent someone from suing them if I do something bad. I thought the amount seemed a bit fishy though. I'll have a talk with them. I hope they decide that $1m is enough because they seem to have the best rates and overall policies, including a fuel discount. That's especially nice since they are already the cheapest fuel on the field.
 
The City of Conway requires to be on my policy. And to the other posters who said is raises you premium, your wrong. I just did this with Global Aerospace and they said its a common practice for hangar rentals. 0 cost on the premium.
 
Fearless Tower said:
No. Naming the FBO as additional insured on the policy is hardly standard.

I've leased tiedowns and hangars at just a few airports around the country and when Landmark insisted on additional insured it was the first. While not unheard of, my broker thought it was ridiculous as well.
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I don't think he meant the requirement is standard, but that no fee for additional insured is. There are a couple of boats yards that require it too, it's just a phone call away.
 
The simple way to handle this is to line-through and initial changes you want to make to the contract (i.e., $1M, and additional (not named) insured), and hand it back to them.

Sounds like they aren't the only place on the field, so you walk if they don't agree to your terms. Now, be aware that if you break a $15M jet with your flivver, and you have deep pockets, an insurance company is going to come after you. You should be insured for your realistic exposure, not someone else's idea of realistic.
 
Jeff Oslick said:
The simple way to handle this is to line-through and initial changes you want to make to the contract (i.e., $1M, and additional (not named) insured), and hand it back to them.

Sounds like they aren't the only place on the field, so you walk if they don't agree to your terms. Now, be aware that if you break a $15M jet with your flivver, and you have deep pockets, an insurance company is going to come after you. You should be insured for your realistic exposure, not someone else's idea of realistic.
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If you have a $1MM liability limit, and you do $10MM of damage, the insurance will take your million and be done with it. That's the way the industry works, you buy the insurance they recommend, and it'll cover you as long as you aren't trying a scam.
 
JasonM said:
I know of at least 2 airports that require being named on the insurance plan for their "hangars". Both are county owned.
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That I've seen in several places, but $5M on a light single is five times what I've ever seen as the minimum liability to park somewhere other than at military bases. But even there, they required only 1.1 or 1.2, which my insurer was happy to write above the $1M I had for a nominal additional fee.
 
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