FI as sole trader/ltd company & liability insurance

[All Up Weight]

Having just completed my FI(R) rating, I have approached a number of flying schools regarding weekend instruction.

Most have said I would need to set up as a sole trader and invoice the school for hours flown. On the subject of public liability insurance, some have said I would be covered under the schools own insurance whilst others have told me not to worry about it!! They said that if I am concerned I could purchase my own public liability insurance!?!

For me the issue is the risk (one hopes a remote risk) of being involved in an incident and then being sued by a student. Have other instructors worried about this or do folks just get on with the instructing without giving much thought to this 'what if' scenario.

Am I being too cautious?? I'd welcome some advice please.

[duveldrinker]

don´t be cautious, be save. getting this third party liability insurance was the first step I took after completion of my FI rating.

[18greens]

Duveldrinker,

Where did you get the insurance from and what exactly does it cover?

18

[orionsbelt]

AOPA do an Instructors Liability Insurance at 2 levels.

Costs around £180 -£250.

I decided not to take it up as I understood it, it only covers you for the here and now events. i.e. you are accused of negligence after your student had an accident during a solo nav ex into poor wx.
What it does not cover are future type events. e.g. As an Aero's Inst you teach somebody to Aopa standard and in 5 years time they have an accident doing aeros and the family come after you for compensation as you were his teacher. Believe it has happened in USA. So I decided the only way was to prove non negligence by keeping very accurate records and getting student to sign for each aeros brief and long lectures. All a pain in the butt.

In terms of the club stating you are covered by there insurance, ask for it in writing if it really concerns you. Personally as a Sole trader FI, I would not like to be in a position that tested the case. If you were full time on PAYE then no problem. As a sole trader you are a contractor and as such you have the personal responsibilities e.g. provide own pension / sickpay / ni / tax / etc.

One point to bear in mind is that you could be risking your complete personal estate if you do not have insurance.

Again be cautious keep accurate records and don't be pushed into doing things you don't like particularly trial Lesions (Ex 3 joy flights ) in marginal wx.

Further as a sole trader your accountant might insist that you take out Tax Investigation Insurance. Hundreds of sole traders a year are being targeted by the inland revenue and customs and your defence will costs you around £10000. If you work for only one school then IR 35 comes into play. This all depend on your local tax office. its becoming a minefield

Its because of all this type of thing and the poor pay that I have ceased trading and given it all up. I have too much to loose if it all went wrong.

Cheers ***

[duveldrinker]

@18 greens : AVIABEL in belgium, you can choose the total sum that covers you. My first school proposed 250.000 euro, but I doubled that. Still not much if you are talking about serious incidents.

I think also DELVAG, the insurrance company in the LH-group has such an insurrance.

[homeguard]

I do not know of any such insurance for an FI that is 'sub-contracting' to a flying club, nor can I imagine how it could be obtained, that is of any worth.

Why? Well, you arrive at your flying club and you are assigned to fly with the student who has a contract with the club NOT you. You brief the student without any terms or conditions agreed or inferred between you. The student most likely has no knowledge of your employment status (the last thing in their mind at this point) and will assume that you are an employee of the club and why shouldn't they make such an assumption. Prior to the flight they have paid the club a joining fee, a membership subscription and have booked the flight with the club receptionist/booking office. They will, after the flight, pay the club the cost of their lesson. The next lesson offered by the club may well not be with the same instructor. You may well be the third name in the student logbook and also in the student's training record.

After the briefing you both walk to the aircraft owned/operated by the club and conduct a flight in accordance with the Club Flying Order book and in accordance with standards expected of the club. After three circuits you send the student solo in accordance with the club guidlines.

The student sent solo has an accident. Who does the student sue and who pays out. The club (one insurer) with whom they had a clear and understood contract, the owner of the aeroplane - owned by the club , leased back from another member or from any other third party (another insurer), none of which has the student any knowledge or the instructor (no insurance but a good inheritance) contracted (in some way) to the club and with whom the student may have had no prior knowledge until they arrived for their lesson. The scenario is one of a liability nightmare.

Of course the club holds suitable insurance or is wanting if it dosn't! The club cannot escape its responsibility to its customer/member or to you the instructor. The company offering insurance to the originator of this thread has offered not very much at all.

It is also my believe that the instructor will have a claim against the school should they be involved in any accident during instruction within the scenario I have outlined. The self employed test for tax purposes is not the same when deciding employment responsibilities or for that matter commercial liabilties.