Excess insurance on groups?
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Excess insurance on groups?
Hi. I'm just about to enter a non equity group and the only concern I have is part of the contract:
The Member shall be personally responsible for costs arising from his invalidation of the Company's insurance policy, from operating beyond the expiry of the insurance policy, from uninsured risks, and from that part of any claim which exceeds the limit of liability.
All fair enough though the last bit seems to leave you open to the excess of any insurance claim. Is this standard or have any people had bad experiences of such agreements?
The Member shall be personally responsible for costs arising from his invalidation of the Company's insurance policy, from operating beyond the expiry of the insurance policy, from uninsured risks, and from that part of any claim which exceeds the limit of liability.
All fair enough though the last bit seems to leave you open to the excess of any insurance claim. Is this standard or have any people had bad experiences of such agreements?
Join Date: May 2008
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I AM NOT A LAWYER.
The Member shall be personally responsible for costs arising from his invalidation of the Company's insurance policy, from operating beyond the expiry of the insurance policy, from uninsured risks, and from that part of any claim which exceeds the limit of liability.
Let's break this down.
1) The Member shall be personally responsible for costs arising from his invalidation of the Company's insurance policy
I take this to mean that if you fly the aircraft without insurance and break it, or are caught flying outside the terms of the insurance and break it, or are prosecuted for flying without valid insurance for any reason, YOU foot the bill.
2) from operating beyond the expiry of the insurance policy
similar to point (1)
3) from uninsured risks
similar to point (1)
4) and from that part of any claim which exceeds the limit of liability
e.g. something costs £100,000 to fix (e.g. the aircraft + civil action taken against you by a 3rd party) and you are only covered to £50,000, YOU will have to personally find £50,000.
What I would also seek clarification on is if Member #2 did something that you had absolutely nothing to do with, but was related to this agreement, do you still have to pay out of YOUR pocket? I know of situation where this exact problem arises.
e.g. You form a group with 4 others. 1 other person gets the group sued through neglegence. You all MUST pay 1/5 share of whatever.
If possible, get a clause included that states that if any other member screws up, YOU ARE NOT LIABLE FOR THEIR MISTAKE, and not only that, but ensure it is actually legally binding. Another gotcha is that it is there, but unenforcable.
ECAM Actions.
The Member shall be personally responsible for costs arising from his invalidation of the Company's insurance policy, from operating beyond the expiry of the insurance policy, from uninsured risks, and from that part of any claim which exceeds the limit of liability.
Let's break this down.
1) The Member shall be personally responsible for costs arising from his invalidation of the Company's insurance policy
I take this to mean that if you fly the aircraft without insurance and break it, or are caught flying outside the terms of the insurance and break it, or are prosecuted for flying without valid insurance for any reason, YOU foot the bill.
2) from operating beyond the expiry of the insurance policy
similar to point (1)
3) from uninsured risks
similar to point (1)
4) and from that part of any claim which exceeds the limit of liability
e.g. something costs £100,000 to fix (e.g. the aircraft + civil action taken against you by a 3rd party) and you are only covered to £50,000, YOU will have to personally find £50,000.
What I would also seek clarification on is if Member #2 did something that you had absolutely nothing to do with, but was related to this agreement, do you still have to pay out of YOUR pocket? I know of situation where this exact problem arises.
e.g. You form a group with 4 others. 1 other person gets the group sued through neglegence. You all MUST pay 1/5 share of whatever.
If possible, get a clause included that states that if any other member screws up, YOU ARE NOT LIABLE FOR THEIR MISTAKE, and not only that, but ensure it is actually legally binding. Another gotcha is that it is there, but unenforcable.
ECAM Actions.
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Under the Civil Aviation Act there is a strict liabilty in law on the aircraft owners, regardless of PIC. If insurance cover is inadequate then all joint owners remain liable. This is the major advantage of groups incorporated as limited liability companies.
As for other matters, arranging and maintaining insurance cover is usually the responsibilty of one particular group member (in my own group it is me) If that particular individual forgets or neglects to renew or maintain insurance cover , you may never know about it and yet under a literal interpretation of the clause you quote you would still be liable.
As for other matters, arranging and maintaining insurance cover is usually the responsibilty of one particular group member (in my own group it is me) If that particular individual forgets or neglects to renew or maintain insurance cover , you may never know about it and yet under a literal interpretation of the clause you quote you would still be liable.
I note it's a non-equity group, so you will not have owner liability. Have you seen the full terms of the insurance policy, including any small-print? Do you know the date of renewal, and the payment system? ( If payed monthly, a missed payment might affect validity.) Do you know the date of airworthiness renewal? Insurance will be invalid if that is missed. What access will you have to the maintanance record? That could also invalidate insurance.
How much flying of the aircraft will the owner be doing? How much owner experience does he/she have? What do you know about the owner?
My experience is 19+ years with a small shared equity group, where it is easy to keep a check on things, as the records guy is also the booking co-ordinator.
How much flying of the aircraft will the owner be doing? How much owner experience does he/she have? What do you know about the owner?
My experience is 19+ years with a small shared equity group, where it is easy to keep a check on things, as the records guy is also the booking co-ordinator.
