The REAL cost of insurance

[MacLaren1]

Hi guys. I normally fly things with blades upfront, but am fascinated by one aspect of helicopters.

If you Google accidents and helicopters, you very quickly find yourself in a world of court cases and lawyers; wild (and not so wild) accusations of design faults which have allegedly killed people; fuel tanks which have exploded on impact when they shouldn't; and manufacturers facing massive legal bills.

More so, it seems, than for most fixed wing aircraft makers.

My question is this - we all pay insurance for our aircraft, but if you buy a NEW chopper, roughly how much of the purchase price is factored in for the maker's court cases? Clearly, they must have insurance to cover this, but ultimately no insurance company can keep paying out if the costs are excessive/ ongoing.

I realise this will vary by maker, but any ballpark percentages?

Thanks in anticipation.

[Ascend Charlie]

No worse than the planks, I seem to recall cases 10 or more years ago where Piper and Cessna stopped making planes because of all the legal cases going on.

[parabellum]

The manufacturers will have professional indemnity cover, at an appropriate price and the hulls and pax liabilities cover will be at a considerably greater rate than a fixed wing aircraft.

[FLY 7]

I understood Robinson 'self insure' - i.e. they pay lawyers not insurance companies.

[parabellum]

Yes, self insurance is an option sometimes, depends on the risk, for example, you have to carry third party cover to operate in and out of some airports/fields, if you were to crash and it involved the buildings etc. the damage bill at the airport could run to many, many millions and I would expect the airport to insist on insurance placed in an acceptable and recognised market.


Self insurance of hulls is not unheard of, particularly for single aircraft owners. Liabilities would be another matter, as they too can run to millions and millions!


Self insurance for professional indemnity, by a manufacturer, I would classify as reckless, but I suppose it is possible.

[Paul Cantrell]

Frank Robinson always was against the idea of settlements when his company was not at fault. He felt it encouraged people to file frivolous lawsuits. As FLY 7 said, his idea is to vigorously fight in court those sorts of lawsuits so that people think twice about bringing that kind of litigation against his company.

Back in the 80s or 90s he mentioned to a class I was in that he couldn't make money if he had to pay the kinds of rates Cessna and Piper were paying, and he would rather just operate at a profit, and if a couple really big settlements came along, close the doors.

Seems like the strategy has worked for his company.