What and who can be covered as "additional insured" on aircraft policy?

[Skyranger]

A while ago on our aircraft liability policy we had the owner of the hanger we were sharing added as "additional insured" as well as the FBO. It cost us nothing. But I was never clear exactly or even approximately what that protected them or me from by having that.

Any idea?

Also I noticed that on a renters ("non-owned") aircraft policy it also had the option of additional insured. So curious who or what someone might like to add as additional insured? A named flying club? A friend whose plane you sometime borrow?

 

[Chip Sylverne]

An additional insured is afforded the same coverage as the policyholder. For instance, if you allow someone to fly your aircraft under the open pilot warrantee, if there's an accident YOU are covered, but they aren't. If they are flying as an additional insured/named pilot, they get the policy coverage too.

 

[midlifeflyer]

If you have the policy, the endorsement will tell you. In the first context it most likely protected the hangar owner from claims that might be made by others against the hanger owner arising from your use of the hangar. Say, for example, someone falls in your hangar and breaks their arm.

In the second situation, it’s most likely to protect someone ekse from what you might do. For example, some rescue/charitable organizations will want to be named as additional insured in case you injure the passenger and the passenger wants to sue them.

There are different types of additional insureds. Their roles and protections are defined in the endorsements,

 

[Jon Howard]

A while ago on our aircraft liability policy we had the owner of the hanger we were sharing added as "additional insured" as well as the FBO. It cost us nothing. But I was never clear exactly or even approximately what that protected them or me from by having that.

Any idea?

Also I noticed that on a renters ("non-owned") aircraft policy it also had the option of additional insured. So curious who or what someone might like to add as additional insured? A named flying club? A friend whose plane you sometime borrow?

Adding an "additional insured" does nothing for you except a) potentially dilute your limits and b) meet your landlord's insurance requirement. For example, you purchase a policy with a liability limit of $1,000,000 each occurrence. If someone suffers bodily and sues both you and the additional insured, you don't each get $1,000,000 of coverage - you share the single $1,000,000 limit. If a court found you each liable for $750,000 ($1,500,000 total), the policy would pay $1,000,000 and someone would still owe $500,000. What the additional insured wants is to have YOUR policy respond first so that their policy is insulated from the claim - thus saving them insurance premiums. All they are doing is trying to transfer their risk onto your policy (they are getting free coverage from you).

Typically on a renter/non-owned policy you might add your employer as additional insured if you need to rent aircraft to fly on business.

 

[Anthem]

An additional insured is afforded the same coverage as the policyholder. For instance, if you allow someone to fly your aircraft under the open pilot warrantee, if there's an accident YOU are covered, but they aren't. If they are flying as an additional insured/named pilot, they get the policy coverage too.

I believe there is a difference between additional insured and named pilot. Named pilot still covers the original insured (named insured) when the additional named pilot is flying it. But it doesnt convey the same coverage as "additional insured" which gives the same coverage as the owner of the insurance policy. You as a named pilot should also get a subrogation waiver - whereas an additional insured doesnt need that waiver.

 

[Chip Sylverne]

I believe there is a difference between additional insured and named pilot. Named pilot still covers the original insured (named insured) when the additional named pilot is flying it. But it doesnt convey the same coverage as "additional insured" which gives the same coverage as the owner of the insurance policy. You as a named pilot should also get a subrogation waiver - whereas an additional insured doesnt need that waiver.

Named insureds have an insurable interest in the policy such as leinholders, partners etc.. Additional insureds are added by endorsement, like FBO's, hangar and tie down owners, owners of the business you work for if you use you airplane for business travel who bear risk but have no insurable interest. Named pilots are covered by the terms of the policy when acting as pilot in command.

But the best advice is to read the policy form. They aren't all the same.

 

[Clip4]

A while ago on our aircraft liability policy we had the owner of the hanger we were sharing added as "additional insured" as well as the FBO. It cost us nothing. But I was never clear exactly or even approximately what that protected them or me from by having that.

Any idea?

Also I noticed that on a renters ("non-owned") aircraft policy it also had the option of additional insured. So curious who or what someone might like to add as additional insured? A named flying club? A friend whose plane you sometime borrow?

Why would anyone add an FBO as an insured on their aircraft insurance? Even if you hangar the aircraft under their roof, the FBO should not be an insured on your policy.



The added insured on a renters policy would be an employer if you rented the plane and used it for business.

 

[midlifeflyer]

Why would anyone add an FBO as an insured on their aircraft insurance? Even if you hangar the aircraft under their roof, the FBO should not be an insured on your policy.

Usually because the lease requires it. I’ve seen similar in non-aviation commercial leases. Pretty common. Some might say standard.

 

[Clip4]

Usually because the lease requires it. I’ve seen similar in non-aviation commercial leases. Pretty common. Some might say standard.

Having an FBO as a named insured is a conflict of interest because the FBO never operates your airplane but does service your airplane and may be in part the cause of a liability suit against you. You really want to conference with your broker and place limits on any coverage you extend an FBO.

 

[Pinecone]

Then you will not be able to hangar or tie down your airplane at most any airport.

 

[midlifeflyer]

Then you will not be able to hangar or tie down your airplane at most any airport.

The problem with discussions about insurance policy provisions is that, rather than reading what they say, people will often imagine what they say, and then object to their own imaginary provision.

 

[Chip Sylverne]

Having an FBO as a named insured is a conflict of interest because the FBO never operates your airplane but does service your airplane and may be in part the cause of a liability suit against you. You really want to conference with your broker and place limits on any coverage you extend an FBO.

Think of it as a waiver of subrogation. If your aircraft is damaged and your insurance pays the claim, if the FBO is an additional insured your company can't go after them to recover. If the FBO is negligent, their insurance will cover.

 

[midlifeflyer]

Think of it as a waiver of subrogation. If your aircraft is damaged and your insurance pays the claim, if the FBO is an additional insured your company can't go after them to recover. If the FBO is negligent, their insurance will cover.

Not according to the ones I’ve read.

 

[Chip Sylverne]

Not according to the ones I’ve read.

You're saying an underwriter can subrogate against their own insured?
Never happen.

 

[BillTIZ]

Why would anyone add an FBO as an insured on their aircraft insurance? Even if you hangar the aircraft under their roof, the FBO should not be an insured on your policy.

If you or someone you approved is flying/moving your aircraft and causes damage, the injured party can sue you. They will also sue the airport owner/manager because they allowed you to operate on "their" airport. So now the "owner/manager" is insured against this under your policy for damages related to your negligence.

If the airport owner/manager damages your aircraft in the process of doing their work. Fuel truck hits it, lawn mower throws a rock through it, their supplied shade hangar falls on it. They are not covered for that under your policy as an additional insured for their negligence, they have their own policy for that.

 

[midlifeflyer]

You're saying an underwriter can subrogate against their own insured?
Never happen.

I’m saying that an “additional insured” endorsement controls the relationship of the parties and the language of the ones I’ve read do not treat this specific type of very limited insured in the same way as a general insured party.

Are you saying you have never read an endorsement with language like, “…is not an insured with respect to…” or “is only an insured with respect to…”? I have, many times.

 

[midlifeflyer]

If you or someone you approved is flying/moving your aircraft and causes damage, the injured party can sue you. They will also sue the airport owner/manager because they allowed you to operate on "their" airport. So now the "owner/manager" is insured against this under your policy for damages related to your negligence.

If the airport owner/manager damages your aircraft in the process of doing their work. Fuel truck hits it, lawn mower throws a rock through it, their supplied shade hangar falls on it. They are not covered for that under your policy as an additional insured for their negligence, they have their own policy for that.

Damn! Sounds like you’ve read one of these!

 

[Clip4]

If you or someone you approved is flying/moving your aircraft and causes damage, the injured party can sue you. They will also sue the airport owner/manager because they allowed you to operate on "their" airport. So now the "owner/manager" is insured against this under your policy for damages related to your negligence.

If the airport owner/manager damages your aircraft in the process of doing their work. Fuel truck hits it, lawn mower throws a rock through it, their supplied shade hangar falls on it. They are not covered for that under your policy as an additional insured for their negligence, they have their own policy for that.

Airport authority requiring to named additional insured on an aircraft policy is common.

An airport authority requiring an FBO or other business on an airport to carry a minimum level of liability insurance and hanger keepers insurance naming the airport authority as an additional insured is also very common. Hangar keepers liability insurance covers damage to or destruction of the aircraft of others while in the insured's custody for storage, repair, or safekeeping and while in or on the scheduled premises.

An FBO requiring the aircraft owner to name the FBO as an additional insured is not common and may allow the FBO to make a claim under your policy when the claim should be under the FBO’s policy.

 

[midwestpa24]

Here is an example of why an airport or FBO requests to be also named.

I have a bank of ten T-Hangars, each rented to an individual aircraft owner.

One aircraft catches fire, say a malfunctioning battery charger or heater, whatever. The other ten aircraft receive smoke, water and fire damage as a result. They will sue both the airport and the fire aircraft owner. The fire aircraft owners insurance will provide protection, obviously up to the insurance limit, for both parties.

We as the airport of course have our own insurance, but our policy and premiums are based on us protecting ourselves through certain lease requirements including requiring all hangar tenants to provide hangar keeper insurance with us also named.

 

[Clip4]

Here is an example of why an airport or FBO requests to be also named.

I have a bank of ten T-Hangars, each rented to an individual aircraft owner.

One aircraft catches fire, say a malfunctioning battery charger or heater, whatever. The other ten aircraft receive smoke, water and fire damage as a result. They will sue both the airport and the fire aircraft owner. The fire aircraft owners insurance will provide protection, obviously up to the insurance limit, for both parties.

We as the airport of course have our own insurance, but our policy and premiums are based on us protecting ourselves through certain lease requirements including requiring all hangar tenants to provide hangar keeper insurance with us also named.

You state “I have a bank of ten hangars”. Then say “We as the airport of course have our insurance, but our policy and premiums are based on us protecting ourselves through certain lease requirements requiring all hangar tenants to provide hanger keeper insurance with us also named.”

If you own ten hangars, the airport needs to require you purchase keep hanger keeper insurance with the airport also named. You are the hangar keeper. A fire can be ruled to have started from faulty wiring in your hangars amd the airport is not protected from your liability.

 

[midwestpa24]

You state “I have a bank of ten hangars”. Then say “We as the airport of course have our insurance, but our policy and premiums are based on us protecting ourselves through certain lease requirements requiring all hangar tenants to provide hanger keeper insurance with us also named.”

If you own ten hangars, the airport needs to require you purchase keep hanger keeper insurance with the airport also named. You are the hangar keeper. A fire can be ruled to have started from faulty wiring in your hangars amd the airport is not protected from your liability.

Maybe my post had a little ambiguity. I am the Airport.

 

[midlifeflyer]

Here is an example of why an airport or FBO requests to be also named.

I have a bank of ten T-Hangars, each rented to an individual aircraft owner.

One aircraft catches fire, say a malfunctioning battery charger or heater, whatever. The other ten aircraft receive smoke, water and fire damage as a result. They will sue both the airport and the fire aircraft owner. The fire aircraft owners insurance will provide protection, obviously up to the insurance limit, for both parties.

We as the airport of course have our own insurance, but our policy and premiums are based on us protecting ourselves through certain lease requirements including requiring all hangar tenants to provide hangar keeper insurance with us also named.

A little extreme but a decent example. You could add, OTOH, if the fire was caused by the negligence of the airport because of something like faulty wiring that was the airport’s responsibility rather than an aircraft owner’s, the language of the typical endorsement on the owners’ policies:
(1) would not insure the airport;
(2) would not prevent the owners from suing the airport; and
(3) if the owners’ insurance paid for the hull damage, would not prevent the insurers from subrogating against (suing) the airport.


(That’s not to say something else might not prevent any of those claims)

 

[Chip Sylverne]

I’m saying that an “additional insured” endorsement controls the relationship of the parties and the language of the ones I’ve read do not treat this specific type of very limited insured in the same way as a general insured party.

Are you saying you have never read an endorsement with language like, “…is not an insured with respect to…” or “is only an insured with respect to…”? I have, many times.

I'm saying that an additional insured endorsement affords the named insured's liability cover to the endorsed party, in whole or in part depending on the contractual language of the endorsement, against a third party's negligent actions. There are any number of ways that coverage can be realized in the event of a third party claim, from simply saving the endorsed party the expense of providing a legal defense up to and including paying a judgement.

 

[midlifeflyer]

I'm saying that an additional insured endorsement affords the named insured's liability cover to the endorsed party, in whole or in part depending on the contractual language of the endorsement,

Exactly. And if they are insured with respect to that type of claim the anti-subrogation rule applies and if they are not, it doesn't. The typical airport additional insured endorsement insures the airport "only as respects operations of the Named Insured," not for claims arising from services the airport provides. Those tend to be specifically excluded with language like, "we won’t cover X for claims arising out of their liability as a manufacturer, seller, handler, distributor or service facility of any product or service sold, handled, distributed or provided."

To use something a bit more common than @midwestpa24's fire, if the airport-run FBO fills your Cessna 172P with Jet fuel, do you think they are protected by your policy? That's what you effectively said earlier.

 

[Chip Sylverne]

Exactly. And if they are insured with respect to that type of claim the anti-subrogation rule applies and if they are not, it doesn't. The typical airport additional insured endorsement insures the airport "only as respects operations of the Named Insured," not for claims arising from services the airport provides. Those tend to be specifically excluded with language like, "we won’t cover X for claims arising out of their liability as a manufacturer, seller, handler, distributor or service facility of any product or service sold, handled, distributed or provided."

To use something a bit more common than @midwestpa24's fire, if the airport-run FBO fills your Cessna 172P with Jet fuel, do you think they are protected by your policy? That's what you effectively said earlier.

No, it's not.. if an FBO fills a 172 with jet fuel, they are directly liable for that negligence. Where's the third party?

My example was more along the lines of through some negligent action of the named insured, a covered loss in a hangar is paid. If the airport/owner of the hangar is an additional insured on that policy, they have cover if the underwriter who paid the loss initiates action against them to recover.

 

[midlifeflyer]

No, it's not.. if an FBO fills a 172 with jet fuel, they are directly liable for that negligence. Where's the third party?

My example was more along the lines of through some negligent action of the named insured, a covered loss in a hangar is paid. If the airport/owner of the hangar is an additional insured on that policy, they have cover if the underwriter who paid the loss initiates action against them to recover.

That's absolutely correct. In the context of the "I would never let the airport be an additonal insured" comments where a number of people were insist that the Airport is insured for all all purposes, maybe I misunderstood what you said. Or at least what you meant. It looks like we agree completely. Sorry about that.

 

[3393RP]

The reality is that the words in an insurance policy prior to and following "additional insured" dictate the parties covered or not covered and may or may not name all the hazards with specificity.

Arguing details or presenting various scenarios which are asserted to be or not be covered by relying on the two words is futile. It is the body of the policy surrounding them that determines coverage.

 

[midlifeflyer]

The reality is that the words in an insurance policy prior to and following "additional insured" dictate the parties covered or not covered and may or may not name all the hazards with specificity.

Arguing details or presenting various scenarios which are asserted to be or not be covered by relying on the two words is futile. It is the body of the policy surrounding them that determines coverage.

You mean there's actually a difference between
(a) "If we get sued because of something you did, your insurance coves us too" and
(b) "If your airplane is damaged, we get the money"
?
Shocking!

How can that be? The both say "Additional Insured" in the title!

 

[MIFlyer]

Maybe my post had a little ambiguity. I am the Airport.

I'm very curious about this. In your experience, will Hangar Keeper's insurance, purchased by the airplane owner, typically satisfy the airport lease requirement?

 

[midwestpa24]

I'm very curious about this. In your experience, will Hangar Keeper's insurance, purchased by the airplane owner, typically satisfy the airport lease requirement?

That would vary on an airport to airport basis. Each has their own lease requirements. Ours is for $1M hangar keeper liability with the Airport named as also insured.

My one experience being a defendant in a lawsuit involved being named as an also insured. Without getting into details, an event was held on our property which required the organizer to purchase event insurance with us as named insured. An incident occurred which resulted in a lawsuit against us as the property owner, the organizer of the event, and the vendor involved. The organizer's insurance company provided legal services to us and would have covered our end of the payout had it gone to that. Our insurance was never in question nor got involved. That is what the also insured buys you, protection from someone else's liability.

 

[MIFlyer]

That would vary on an airport to airport basis. Each has their own lease requirements. Ours is for $1M hangar keeper liability with the Airport named as also insured.

My one experience being a defendant in a lawsuit involved being named as an also insured. Without getting into details, an event was held on our property which required the organizer to purchase event insurance with us as named insured. An incident occurred which resulted in a lawsuit against us as the property owner, the organizer of the event, and the vendor involved. The organizer's insurance company provided legal services to us and would have covered our end of the payout had it gone to that. Our insurance was never in question nor got involved. That is what the also insured buys you, protection from someone else's liability.

Thanks, not to drift too far, but I think that hull coverage is poor odds for some of us and I'd only buy insurance enough to satisfy the airport so I could base there, it's been mentioned that hangar keeper's will sometimes keep the airport happy, and it's MUCH less than the 5-6K/year in insurance.