1. What is the written policy of the organisation for the authorisation of personnel including ground personnel to start engines and to taxi the aircraft?
2. What is the written policy of the organisation for the loading of personnel when aircraft have engines running?
3. Was the student qualified to operate solo i.e. was this a student who had previously solo'ed but was this time on a dual flight?
You are quite right that the instructor was effectively P1 and has the responsibility for the safety of the aircraft and more importantly the safety of those on board from the moment that the first person boards the aircraft for the purpose of flight.
What needs to be done is a check to find out answers to the above and thus to find out if;
a) The organisation has poor prrocedures or practices which lead to the incident.
b) The instructor breached written procedures (authorising the start while not there, expecting to board with engines running when the procedures preclude this etc); and/or
c) The student was acting within or without their qualifications by starting the engine unsupervised.
Most organisations have clear instructions regarding the above. Often there is a formal method of authorisation of personnel as being competent to start engines and taxi aircraft. This procedure would include ground personnel as well as students.
When dealing with the insurance excess, one has to considder some factors;
1. Was this a commercial organisation which in order to maximise profit, accpeted a risk by only partly insuring agains a loss.
2. Was there an agreement that the student is responsible for any insurance excess. This would only normally apply when the student is a syndicate member i.e. part owner (in fact and not just name), is aware of and has agreed to the excess and is responsible for causing the loss. (see the above regarding procedures).
3. Most waivers signed regarding recoveries of losses or not holding organisations responsible in the event of an accident are worth slightly less than toilet paper.
I believe that if this is a case of an instructor on a dual flight instructing the student to start the aircraft and they will be out later then the organisation who employs the instructor will be responsible for the loss because either they did not put proper procedures in place and ensure that they were followed or their employee/ contractor disregarded the procedures.
Regards,
DFC