GA and Insurance
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GA and Insurance
IO540
There was no post-crash litigation - or none that had to be decided in court. The Hill family paid the claims without argument, which ruined them financially.
Some describe it as frightening; others as very worrying.
An owner-pilot's insurance policy will contain a 'Condition Precedent' to making a claim under the policy in these or similar words:
..
It doesn't deal with the post-crash litigation and neither do the few aviation accident publications in which the topic came up. My guess is that since passenger liability (Civil Aviation Act) depends on the pilot being found negligent, this is what happened, resulting in his estate being stripped by the passengers' estates. But I never came across anybody who knew any details for sure.
It is always interesting and educational to see what kinds of stuff causes insurers to not pay out
An owner-pilot's insurance policy will contain a 'Condition Precedent' to making a claim under the policy in these or similar words:
The Insured shall comply with all air navigation and airworthiness orders and requirements issued by any competent authority affecting the safe operation of the Aircraft
and shall ensure that
(a) the Aircraft is airworthy at the commencement of each Flight;
(b) all Log Books and other records in connection with the Aircraft which are required by any official regulations in force from time to time shall be kept up to date and shall be produced to the Insurers or their Agents on request;
(c) the employees and agents of the Insured comply with such orders and requirements.
Bear in mind that, given how widely the clause is drafted, if the insured fails to comply with any of the above insurers may refuse to pay under the policy even if the failure had nothing whatsoever to do with the accident...
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The ANO in a nutshell says, don't crash the aircraft.
Many accidents involve a flight which has not complied with some aspect of the air navigation order and in general the pilot population seems happy with how insurance companies treat them, so they don't appear to enforce the letter. Any trivial violation of any logging, ANO or airworthiness order - no matter how un-connected to the cause of the accident could be used to avoid payment - and there doesn't seem to be an uproar from the estates of third parties who have died in accidents or spouses being bankrupted.
At what point is the insurance company likely to walk away. I would find it very disappointing if my insurer was going to walk away because my medical was a week over due, yet if I told them I was an ATPL with 1500 Citation hours and no accidents (really expired NPPL, 35 hours, in three wrecked flex wings) and then crashed my jet into central London I would expect the insurance company to walk away.
Some case examples would be interesting to have a feel for how the insurance companies view this continuum (or maybe I should be moving my assets into an offshore trust and holding the aircraft in a Ltd company so I don't need to worry about liability insurance
)
Many accidents involve a flight which has not complied with some aspect of the air navigation order and in general the pilot population seems happy with how insurance companies treat them, so they don't appear to enforce the letter. Any trivial violation of any logging, ANO or airworthiness order - no matter how un-connected to the cause of the accident could be used to avoid payment - and there doesn't seem to be an uproar from the estates of third parties who have died in accidents or spouses being bankrupted.
At what point is the insurance company likely to walk away. I would find it very disappointing if my insurer was going to walk away because my medical was a week over due, yet if I told them I was an ATPL with 1500 Citation hours and no accidents (really expired NPPL, 35 hours, in three wrecked flex wings) and then crashed my jet into central London I would expect the insurance company to walk away.
Some case examples would be interesting to have a feel for how the insurance companies view this continuum (or maybe I should be moving my assets into an offshore trust and holding the aircraft in a Ltd company so I don't need to worry about liability insurance
)
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The other problems are the varying rules.
Example, a RV9 with funky glass panel and owner panel mounted G496 crashes. Insurance pays out.
A privately run PA28 with normal instruments and panel mounted G496 crashes, yet insurance doesn't pay out due to "illegal" (note not dangerous) mod.
I don't think that in an instance like this then the insurance should NOT pay out, and in my hypothetial case of the PA28 with GPS, had the GPS not had anything to do with the crash then I think the insurance should cough up. Otherwise insurance companies will use any loophole to not pay out, even if it had no bearing on the accident and we might as well give up flying now.
Interesting that in the Graham Hill case the AAIB kept refering to (paraphrase) "he didn't have a licence but met all the requirements had he applied". It sort of implied that he was qualified to fly the approach but that his papers were not in order.
From a layman's POV how are we to know that a maintenance place is doing their duty and actually doing the correct maintenance? I have heard a horror story of one well known place passing off second hand parts as new, or not actually doing the work that has been logged and paid for. If this is subsequently dug up as part of an AAIB investigation, you can bet the maintenance place will wash their hands of it and cover their arse the best way they can (lie?)......
Example, a RV9 with funky glass panel and owner panel mounted G496 crashes. Insurance pays out.
A privately run PA28 with normal instruments and panel mounted G496 crashes, yet insurance doesn't pay out due to "illegal" (note not dangerous) mod.
I don't think that in an instance like this then the insurance should NOT pay out, and in my hypothetial case of the PA28 with GPS, had the GPS not had anything to do with the crash then I think the insurance should cough up. Otherwise insurance companies will use any loophole to not pay out, even if it had no bearing on the accident and we might as well give up flying now.
Interesting that in the Graham Hill case the AAIB kept refering to (paraphrase) "he didn't have a licence but met all the requirements had he applied". It sort of implied that he was qualified to fly the approach but that his papers were not in order.
From a layman's POV how are we to know that a maintenance place is doing their duty and actually doing the correct maintenance? I have heard a horror story of one well known place passing off second hand parts as new, or not actually doing the work that has been logged and paid for. If this is subsequently dug up as part of an AAIB investigation, you can bet the maintenance place will wash their hands of it and cover their arse the best way they can (lie?)......
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I doubt the AAIB digs all that deep, in GA accidents. Most GA planes have a long history with lots of gaps in the records.
The insurers don't dig all that deep either but I know they will check the pilot and aircraft papers (CofA etc) to make sure the flight was legal before it got airborne.
In this accident, they probably just rolled their eyes upwards at the extent of the stuff they found - not that any of it directly contributed to the accident (other than through pilot attitude and one can't do anything about that).
Based on past conversations with loss adjusters I am sure that insurance won't pay out in this case, so the pilot's estate will be exposed to civil claims.
The insurers don't dig all that deep either but I know they will check the pilot and aircraft papers (CofA etc) to make sure the flight was legal before it got airborne.
In this accident, they probably just rolled their eyes upwards at the extent of the stuff they found - not that any of it directly contributed to the accident (other than through pilot attitude and one can't do anything about that).
Based on past conversations with loss adjusters I am sure that insurance won't pay out in this case, so the pilot's estate will be exposed to civil claims.
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Based on past conversations with loss adjusters I am sure that insurance won't pay out in this case, so the pilot's estate will be exposed to civil claims.
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I doubt the AAIB digs all that deep, in GA accidents. Most GA planes have a long history with lots of gaps in the records.
I dont know so only guessing but I would imagine where there has been loss of life there would be a thorough investigation which would also be required by the police to discount suicide, murder etc.
We also have to remember that it is not only the deceased persons family who would be looking to make a claim but also a claim would be made to damages on the ground where the aircraft came down.
Pace
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“claim would be made to damages on the ground where the aircraft came down.”
The cost of closing the mainline for several days will easily exceed the likely insurance.
“AAIB reports are not produced for nor guided by either the Police”
True up to a point, but the G-STYX case shows that the Police can use the AAIB report as a basis to bring charges.
Rod1
The cost of closing the mainline for several days will easily exceed the likely insurance.
“AAIB reports are not produced for nor guided by either the Police”
True up to a point, but the G-STYX case shows that the Police can use the AAIB report as a basis to bring charges.
Rod1
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AAIB reports are not produced for nor guided by either the Police or Insurers requirements.
Also, it seems clear to me that the AAIB avoids certain areas which are going to be contested. I recall reading one report where it was really obvious that the maintenance company should be taken to pieces and closed down, but nothing was mentioned about that angle.
I would imagine where there has been loss of life there would be a thorough investigation which would also be required by the police to discount suicide, murder etc.
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mm flynn
That is a non sequitur. Even if your first two propositions are correct, your conclusion does not logically follow. Most pilots with aviation insurance policies never need to make a claim under their policy so don’t know how their insurers would treat them if they did. Most policy-holders don't fully understand the far-reaching effect of the Condition Precedent clause; in particular, that even a minor breach which has nothing whatsoever to do with the accident can lead to insurers declining to pay.
Then avoid the risk of disappointment by ensuring your medical is current, just in case you have an accident and need to claim under your policy. You might be lucky if it’s a relatively small claim but the chances reduce in inverse proportion to the size of the claim.
An accident in which a couple of high-earning passengers each with young children are either killed or so badly injured that they can’t work again can easily result in damages running into £millions.
Insurance is a business. I leave you to assess the chances of insurers voluntarily paying out large sums if, under the contract, they are not obliged to do so.
Given that you would have obtained the insurance policy by false representations, so would I.
Licensing exampleValid UK PPL, valid FAA ATPL and IR, valid Medical. Pilot had 2500+ hours (1200+ on type), flew the aircraft frequently, voluntarily undertook six-monthly refresher training (consistently excellent reports) and, just two months before the crash, had achieved a high standard both during refresher training and in his FAA Type Rating and IR tests.
Because the aircraft was registered in Xxxxland, the pilot was required to hold an Xxxxland Certificate of Validation. Certificates issued on the basis of a current FAA licence, and payment of $50. No test requirement.
The most recent Certificate had expired.
Fatal accident.
The AAIB considered that the absence of a current Certificate of Validation was not a factor in the accident.
Insurers did not suggest it was.
However, relying upon the Condition Precedent clause, they declined to pay because the pilot was flying without a valid licence.
Airworthiness example
Aircraft meticulously maintained, confirmed by detailed maintenance records and other evidence.
Aircraft exceeded maximum certificated take-off weight.
Fatal accident.
AAIB considered that aircraft weight was not a factor in the accident.
Insurers did not suggest it was.
However, relying upon the Condition Precedent clause, they declined to pay because the aircraft was not airworthy when the accident occurred.
bose-x
I agree but, in the context of an aviation insurance policy, there is no difference.
Rod1
Many informed people consider there were many very unsatisfactory aspects of that accident investigation.
Whether or not using AAIB material for a criminal prosecution is in the long-term interests of flight safety is obviously a matter of opinion.
IO540
That is not correct.
A draft copyof the report is sent to the pilot or his/her representative and to individuals or organisations whose reputations may be adversely affected by the report. If representations are made concerning the draft, there will be some delay in publishing the final report while the AAIB considers them; it may or may not accept them. The AAIB does not wait until all parties agree with the contents of the report; in many cases that would be impossible.
Again, that is not correct. When I was a barrister I dealt with several cases in which aspects of the AAIB's findings and conclusions were contested, either by the party I represented or others.
The AAIB is not infallible and wouldn't claim to be. However, with only one exception in over 20 years, I had enormous respect both for the expertise, investigating skills and objectivity of individual investigators and for the conduct of the AAIB as an organisation.
.
Many accidents involve a flight which has not complied with some aspect of the air navigation order and in general the pilot population seems happy with how insurance companies treat them, so they don't appear to enforce the letter.
I would find it very disappointing if my insurer was going to walk away because my medical was a week over due
An accident in which a couple of high-earning passengers each with young children are either killed or so badly injured that they can’t work again can easily result in damages running into £millions.
Insurance is a business. I leave you to assess the chances of insurers voluntarily paying out large sums if, under the contract, they are not obliged to do so.
yet if I told them I was an ATPL with 1500 Citation hours and no accidents (really expired NPPL, 35 hours, in three wrecked flex wings) and then crashed my jet into central London I would expect the insurance company to walk away.
Some case examples would be interesting …..
Because the aircraft was registered in Xxxxland, the pilot was required to hold an Xxxxland Certificate of Validation. Certificates issued on the basis of a current FAA licence, and payment of $50. No test requirement.
The most recent Certificate had expired.
Fatal accident.
The AAIB considered that the absence of a current Certificate of Validation was not a factor in the accident.
Insurers did not suggest it was.
However, relying upon the Condition Precedent clause, they declined to pay because the pilot was flying without a valid licence.
Airworthiness example
Aircraft meticulously maintained, confirmed by detailed maintenance records and other evidence.
Aircraft exceeded maximum certificated take-off weight.
Fatal accident.
AAIB considered that aircraft weight was not a factor in the accident.
Insurers did not suggest it was.
However, relying upon the Condition Precedent clause, they declined to pay because the aircraft was not airworthy when the accident occurred.
bose-x
Letting things lapse through absentmindedness or stupidity is one thing. Clearly and consciously avoiding the system is another thing.
Rod1
the G-STYX case shows that the Police can use the AAIB report as a basis to bring charges.
Whether or not using AAIB material for a criminal prosecution is in the long-term interests of flight safety is obviously a matter of opinion.
IO540
it is well known that until all the parties agree, the report doesn't come out ……….
A draft copyof the report is sent to the pilot or his/her representative and to individuals or organisations whose reputations may be adversely affected by the report. If representations are made concerning the draft, there will be some delay in publishing the final report while the AAIB considers them; it may or may not accept them. The AAIB does not wait until all parties agree with the contents of the report; in many cases that would be impossible.
Also, it seems clear to me that the AAIB avoids certain areas which are going to be contested.
The AAIB is not infallible and wouldn't claim to be. However, with only one exception in over 20 years, I had enormous respect both for the expertise, investigating skills and objectivity of individual investigators and for the conduct of the AAIB as an organisation.
.
Last edited by Flying Lawyer; 13th Oct 2009 at 23:37.
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Originally Posted by Flying Lawyer
Insurance is a business. I leave you to assess the chances of insurers voluntarily paying out enormous sums if, under the contract, they are not obliged to do so
Both of the referred cases fall into IOs 'Illegal before it got off the ground' category. Are there similar examples for an initially legal flight that for instance ran out of fuel, went VMC to IMC, failed to remain above the MSA or other similar examples of a pilot error that contravened an aspect of the ANO an resulted in the claim being denied.
My 'non sequitur' reflected the noticeable number of accident reports where some aspect of non-compliant paperwork is mentioned and the generally positive view as to how insurance companies handle claims (admittedly the positive comments are from people not involved in fatal accidents).
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I too see this as very worrying as it does appear that an insurance company can get out of paying by pointing out something in the small print which may have nothing to do with the crash.
It is a known fact in motoring that the average car driver breaks numerous laws every day without even realising it.
As MM pointed out in flying there are situations where a pilot can be drawn into something which his licence does not cover him for, everything from inadvertant entry into IMC to inadvertant night landing due to unforecast headwinds etc.
In that way I can understand the pilot in this case not bothering with his insurance as from whats been said here its pretty pointless having it anyway?
If the claim is large enough the insurance company will find a way of not paying it.
Pace
It is a known fact in motoring that the average car driver breaks numerous laws every day without even realising it.
As MM pointed out in flying there are situations where a pilot can be drawn into something which his licence does not cover him for, everything from inadvertant entry into IMC to inadvertant night landing due to unforecast headwinds etc.
In that way I can understand the pilot in this case not bothering with his insurance as from whats been said here its pretty pointless having it anyway?
If the claim is large enough the insurance company will find a way of not paying it.
Pace
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I am not a lawyer but gather that aviation insurance is covered by different regs to say domestic insurance.
In the latter, there have been amply publicised moves to force insurers to not avoid payouts due to irrelevances e.g. a tree falls on your house and they avoid a payout because you were using one room as an office without declaring you were running a business out of there.
One example I recall is that in aviation there is no liability to passengers unless the pilot is found negligent.
OTOH there is a strict liability for ground damage - this incidentally why AFAIK it is pointless to have the plane in a Ltd Co (for liability reasons) if the owner/operator is the only person ever flying it.
In the latter, there have been amply publicised moves to force insurers to not avoid payouts due to irrelevances e.g. a tree falls on your house and they avoid a payout because you were using one room as an office without declaring you were running a business out of there.
One example I recall is that in aviation there is no liability to passengers unless the pilot is found negligent.
OTOH there is a strict liability for ground damage - this incidentally why AFAIK it is pointless to have the plane in a Ltd Co (for liability reasons) if the owner/operator is the only person ever flying it.
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While I agree about the 'its business point', it does seem like poor public policy to allow retail contracts to be structured in a way that omissions not related to the loss can be used to avoid payment.
Why are so many people here continually trying to find loopholes and wriggle out of minor points like OBEYING THE LAW???????
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10540
I run my own aviation interests as a freelance commercial pilot through a limited company.
I do this as I fly as a Captain on business jets worth $ millions.
There is always the worry that if you do something stupid and the insurance wont pay out that whoever will go for you as the Captain and your personal assets.
I dont even want to go into Ferry flying which I have also been involved in in the past as the normal rule book goes out of the window in that. Overweight takeoffs etc etc etc.
Pace
I run my own aviation interests as a freelance commercial pilot through a limited company.
I do this as I fly as a Captain on business jets worth $ millions.
There is always the worry that if you do something stupid and the insurance wont pay out that whoever will go for you as the Captain and your personal assets.
I dont even want to go into Ferry flying which I have also been involved in in the past as the normal rule book goes out of the window in that. Overweight takeoffs etc etc etc.
Pace
Last edited by Pace; 14th Oct 2009 at 09:09.
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Why are so many people here continually trying to find loopholes and wriggle out of minor points like OBEYING THE LAW???????
The insurance refuse to pay out.
I wish things were as simple as obeying the law because sometimes even attempting to do that will kill you.
The law up in the sky in a nasty situation wont help you the right descisions for that situation will, whether that means flying to the letter of the law or totally against it.
Pace
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Pace, I'm not talking about simple mistakes such as the example you quote.
I'm talking about (e.g.) the pilot in current practice who disregards the fact that his medical has expired and who still carries on flying. Something totally unrelated - say, fuel contamination - causes a crash. The Insurance company should pay up, or not?
I'm talking about (e.g.) the pilot in current practice who disregards the fact that his medical has expired and who still carries on flying. Something totally unrelated - say, fuel contamination - causes a crash. The Insurance company should pay up, or not?
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Captain stable
From our legal expert!!! makes one think about an insurance to cover an insurance 
Pace
That is a non sequitur. Even if your first two propositions are correct, your conclusion does not logically follow. Most pilots with aviation insurance policies never need to make a claim under their policy so don’t know how their insurers would treat them if they did. Most policy-holders don't fully understand the far-reaching effect of the Condition Precedent clause; in particular, that even a minor breach which has nothing whatsoever to do with the accident can lead to insurers declining to pay.
Pace
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Captain Sable,
I am quite pleased that you have never inadvertently violated any law, rule, regulation, or order and hope that you have a very diligent review process for all of your actions to ensure that all of the myriad of obligations in modern life are 100% complied with at all times.
I have to confess to becoming aware (after the event) in my flying career of two occasions of technical paperwork lapses. Neither of which was intentional (or recognised at the time) and neither of which had any substantive bearing on the safety of the operation - as in slightly different geographic circumstances other paperwork for the same operation was valid.
It is of concern that with a good faith effort to comply with the laws, and carrying substantially more than the minimum required liability insurance, a minor oversight can leave one swinging in the breeze.
Even more relevant to someone like Pace, who as a diligent sole will have checked the owner of the aircraft has it insured. But whose estate discovers an AD was not complied with (not relevant to Pace's unfortunate demise), the owner's insurance declines the claim and the owner and Pace's estate (as the pilot) are both sued for multi millions - because the jet 'plummeted' into a school and a puppy farm.
I am quite pleased that you have never inadvertently violated any law, rule, regulation, or order and hope that you have a very diligent review process for all of your actions to ensure that all of the myriad of obligations in modern life are 100% complied with at all times.
I have to confess to becoming aware (after the event) in my flying career of two occasions of technical paperwork lapses. Neither of which was intentional (or recognised at the time) and neither of which had any substantive bearing on the safety of the operation - as in slightly different geographic circumstances other paperwork for the same operation was valid.
It is of concern that with a good faith effort to comply with the laws, and carrying substantially more than the minimum required liability insurance, a minor oversight can leave one swinging in the breeze.
Even more relevant to someone like Pace, who as a diligent sole will have checked the owner of the aircraft has it insured. But whose estate discovers an AD was not complied with (not relevant to Pace's unfortunate demise), the owner's insurance declines the claim and the owner and Pace's estate (as the pilot) are both sued for multi millions - because the jet 'plummeted' into a school and a puppy farm.
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Pace, I'm well aware of what Flying Lawyer posted, and I agree with his posts on this thread. I have the greatest of respect for him and know him personally, and have worked with him professionally.
My point was, if you re-read this page, aimed at those who seek to have insurance companies pay out even if they have breached the terms of the contract. See mm flynn's post above.
My point was, if you re-read this page, aimed at those who seek to have insurance companies pay out even if they have breached the terms of the contract. See mm flynn's post above.