866-806-6156 (9 am - 5pm ET)
Insurance Check Out—Are you protected?

By Bob Mackey
Falcon Insurance
Are you protected by insurance while you are performing the duties of a flight instructor or flight examinerè Consider your personal situation when you are giving flight instruction, performing a flight review, or conducting a checkride. And consider how you can manage your risk exposures by eliminating some risks (risk-control) and insuring against other risks (risk-financing).

Whenever you are flight instructing, performing a flight review, or giving a checkride, you are conducting a commercial flight operation. Whether you are acting as an instructor or as an examiner, you’ve been trained to recognize when a pilot is flying satisfactorily or when additional training is necessary. But do you know where you stand if something goes wrongè

Aircraft insurance policies for individually owned aircraft extend “insured” status to a pilot operating the insured aircraft with the permission of the “named insured,” as long as the pilot is either named on the policy as an approved-named pilot or meets the open pilot warranty. Nonetheless, this extension of insurance has limitations. A sample policy wording might read:


“Insured” The unqualified word “insured” means (1) with respects to all Coverages, the Named Insured and (2) with respects to Coverage A, B, C and D only any person while using the aircraft with the permission of the Named Insured provided the actual use is within the scope of such permission and (b) any other person or organization, but only with respect to his or its liability because of acts or omissions of the Named Insured or of an Insured under (a) above, provided, however, that the insurance afforded under this subsection (2) does not apply to

(i) any person or organization, or agent or employee thereof (other than employees of the Named Insured) engaged in the manufacture, maintenance, repair, or sale of aircraft, aircraft engines, components or accessories, or in the operation of any airport, hangar, flying schools, flight service, or aircraft or piloting service, with respect to any occurrence arising out of such activity.

You’ll note, based on the policy wording above, that insurance coverage does not apply if the pilot is conducting certain commercial aviation activities. This particular insurance policy, which is similar to just about every aircraft insurance policy, does not provide insurance protection to a pilot conducting flight training, performing a flight checkride, or conducting an examination.
So there are two ways you can ensure you’re protected, to control or insure against the risk exposure of conducting flight training or performing flight checkrides or examinations:

• Always instruct or perform checkrides in aircraft you are extremely comfortable in. For example, don’t instruct or perform a checkride in an aircraft if you don’t have adequate flight time in that type, if you’re not sure it has been properly maintained, or if you’re flying at an airport you are unfamiliar with or that isn’t suitable for the flight operations you plan to conduct.

• Always make sure you are protected under some form of insurance. Make sure the aircraft owner adds you to his insurance policy as an additional named insured and that the insurance company grants you a waiver of subrogation, or make sure you are insured in the NAFI Instructor Professional Liability and Non-Owned Aircraft Liability Insurance Plan. Usually, an insurance company will make an additional premium charge to the policyholder to extend liability insurance and grant a waiver of subrogation to any person or business that is involved in any commercial aviation activities.

Remember, you are not going to be protected by someone’s aircraft insurance simply because you are listed as named pilot or you meet the open-pilot warranty. The only way to be sure you are properly protected by someone else’s insurance is to have in your possession an original certificate of insurance stating that you are an additional named insured and that the insurance company has granted you a waiver of subrogation. It may take a while to receive the certificate of insurance. Once you do, you need to make sure you clearly understand the certificate and that the certificate is confirming the extension of insurance to you.

A quick and easy alternative—and an assuring one—is to enroll in the NAFI Instructors Professional Liability and Non-Owned Aircraft Liability Insurance Plan.

If you want to enroll in the NAFI Instructors Professional Liability and Non-Owned Aircraft Liability Insurance Plan all you have to do is go online to http://www.falconinsurance.com/eaa_non_owner_brochure.pdf and download the NAFI Plan Application. Fill it out and send it in, along with your premium payment, and you will receive confirmation of your insurance along with a copy of your personal insurance policy. Your insurance protection in the NAFI Plan can cost as little as $200 a year. For less than $2 a day, you can secure a complete package of insurance including all of the coverages mentioned above. For complete details you can get a quote over the phone by contacting the NAFI Insurance Plan Specialist at 866/243-NAFI (6234). As a special discount, NAFI Master CFIs receive a deep discount on the premium you pay for insurance in the NAFI Plan. Premiums paid by NAFI members for insurance in the NAFI Instructors Professional Liability and Non-owned Aircraft Liability Insurance Plan may qualify as a tax-deductible expense. This plan is an exclusive NAFI member benefit available only through Falcon Insurance Agency.

Insurance Check-Out is a special series of insurance related articles for NAFI Members. If you have any topics you would like to see addressed in “Insurance Check-Out,” please e-mail your request to Bob Mackey, Vice President, Falcon Insurance Agency;
[email protected].