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NAFI Insurance Check-Out

How much do you know about liability insuranceè
By Bob Mackey

As pilots we pride ourselves on our level of knowledge about flying. Each pilot certificate and rating we achieve stands as a merit badge to our dedication towards being a better pilot. But how much do we know about liability insuranceè

Liability insurance isn’t rocket science. Basically, when you purchase liability insurance you agree to pay the insurance company money (insurance premium) and the insurance company agrees to indemnify (pay money on your behalf) to someone you might cause bodily injury to or to someone whose property you might damage.

In insurance lingo, liability insurance is set up as a combined single limit of liability insurance for bodily injury and property damage. Liability insurance may be purchased at various levels from $50,000 to $1,000,000 per occurrence. Insurance companies usually add a sub-limit to this insurance. The sub-limit stipulates that the insurance company will not pay any more than a set amount to any one passenger. As an example, you may select a combined single limit of $1,000,000 per occurrence subject to a sub-limit of not more than $100,000 per passenger. Here’s a tip: You may run into a “per person” sub-limit. Don’t buy this insurance. Whyè The term “person” means anyone, passenger or non-passenger. If the sub-limit says “per passenger” this means the sub-limit only limits the amount paid to a passenger and non-passenger is not subject to the sub-limit.

Anyhow, what else do you get when you buy liability insuranceè You get legal defense. If you have ever had to hire an attorney, you already know how much a good attorney can cost. Liability insurance includes legal defense, and this can be significant. In some losses the legal expenses can amount to a tremendous amount of money.

The NAFI Flight Instructors Professional Liability and Non-Owners Liability Insurance Plan is designed to protect NAFI Members as they perform the tasks of flight instruction, checkrides, examinations, and other services as a flight instructor or designated examiner. And furthermore, every time a member buys personal insurance protection through the NAFI Plan, this helps NAFI grow stronger as the leader in professional flight instruction.

For details on the NAFI Plan, all you need to do is call one of the Falcon Insurance specialists at 866/243-NAFI (6234) or go online to: www.nafinet.org.

Bob Mackey is vice president of Falcon Insurance Agency Inc.
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 email your request to: Bob Mackey, Vice President, Falcon Insurance Agency;
[email protected].