Package Policies

Package policies are the most convenient way to combine coverages. Even if an aviation risk is not able to package its liability exposures, its property, crime and inland marine forms can often be packaged together. Aviation operations do not normally qualify for businessowners policy coverage because general liability aviation exposures are not eligible, but locations containing only offices and located away from an airport may be eligible for coverage.

Businessowners Policy (BOP)

Commercial Package Policy (CPP)

Property CoverageS

A thorough property inventory is needed to determine the items to be covered under the aircraft hull policy, the inland marine scheduled property floater, and those that should be insured under property coverage forms. The aircraft itself is not eligible for coverage under most property coverage forms but other types of property are. Most airborne property is excluded. Business personal property transported by air should be covered on an inland marine policy.

The building and personal property coverage form is the most widely used property form, but output policies are gaining popularity because of their pricing and coverage flexibility.

Air transportation operations are often required to continue following a loss, regardless of the situation. As a result, extra expense coverage becomes the primary time element coverage with business income coverage considered an option. Leasehold coverage should be considered if the operation has an advantageous long-term lease.

Types of Property

Building

Business Personal Property

Personal Property of Others

Improvements and Betterments

Property Coverage Forms

Building and Personal Property Coverage Forms

Builders Risk Coverage

Commercial Output Policies

Equipment Breakdown Protection Coverage

Legal Liability Coverage

Standard Property Policy

Perils Insured/Causes of Loss Forms

Property Coverage Options to Consider

Debris Removal Coverage

Ordinance or Law Coverage

Outdoor Trees, Shrubs and Plants Coverage

Spoilage Coverage

Utility Services–Direct Damage Coverage

Valuation Options

Peak Season Limit of Insurance

Replacement Cost

Value Reporting

Time Element Coverages

Business Income with Extra Expense Coverage

Business Income without Extra Expense Coverage

Extra Expense Coverage

Leasehold Interest Coverage

Time Element Coverage Options to Consider

Business Income from Dependent Properties Coverage

Ordinance or Law Increased Period of Restoration Coverage

Utility Services–Time Element Coverage

Inland Marine Coverages

Aviation-related property is often fairly mobile. The property inventory listing should be thoroughly reviewed and any mobile property or property that regularly moves between locations should be covered under the appropriate inland marine coverage form. Computer and camera exposures are part of most aviation risks. The perils insured or covered causes of loss in most inland marine coverage forms are generally equal to or better than the special causes of loss form that applies to property coverage. As an example, many inland marine forms include earthquake and flood coverage.

Accounts Receivable Coverage

Commercial Articles Floaters

Contractors’ Equipment Coverage

Difference in Conditions (DIC) Coverage

Electronic Data Processing Equipment Coverage

Fine Arts Coverage

Scheduled Property Coverage

Signs Coverage

Transportation Coverage

Valuable Papers and Records Coverage

Crime Coverages

The commercial crime coverage includes a number of coverages. While many of the coverages may be appropriate for a given aviation risk, often the most important is the employee theft coverage because of the value of property that can be stolen by trusted employees. The manner in which operations are conducted dictates the coverage that should be written. Some of the more limited crime coverage options listed below may be more appropriate in a specific risk than broader coverages available.

Computer and Fund Transfer Fraud Coverage

Employee Theft Coverage

Forgery or Alteration Coverage

Inside The Premises–Theft of Money and Securities Coverage

Inside The Premises–Robbery or Safe Burglary of Other Property Coverage

Money Orders and Counterfeit Money Coverage

Outside The Premises Coverage

Crime Optional Coverages to Consider

Destruction of Electronic Data or Computer Programs Coverage

Employee Theft and Forgery Policy

Extortion Coverage

Inside The Premises–Robbery or Safe Burglary of Money And Securities Coverage

Inside The Premises–Robbery or Burglary of Other Property Coverage

Inside The Premises–Theft of Other Property Coverage

Kidnap and Ransom Coverage

Lessees of Safe Deposit Boxes Coverage

Securities Deposited With Others Coverage

Telephone Toll Fraud

Unauthorized Reproduction of Computer Software by Employees Coverage

Surety Coverages

Aviation operations are required to have a license or permit in order to conduct operations. Government entities that issue the licenses and permits require a bond to guarantee that the insured will comply with all applicable rules and regulations. If an aviation operation has a contract with a government entity to supply services, it must supply a bond to guarantee performance as contracted for or payment of a previous mutually agreed-to penalty.

Contract–Performance of Service or Supply Bonds

License and Permit Bonds

Commercial Liability Coverages

Liability exposures for aviation risks are normally insured by an aviation general liability policy. However, operations conducted away from an airport or airfield may be insured by a standard general liability policy for the specific type of operation involved. Restaurant and bar operations are not unusual so liquor liability coverage should be considered.

Commercial General Liability (CGL) Coverage

Employee Benefits Liability Coverage

Employment-Related Practices Coverage

Liquor Liability Coverage

Owners and Contractors Protective (OCP) Liability Coverage

Special Events Liability Coverage

Professional Liability Coverages

Aviation risks may employ individuals who provide services that require errors or omissions coverage. In addition, these facilities routinely employ security forces at the air facility who should be covered by law enforcement professional liability coverage. Professional and errors and omissions claims are based on malpractice, error or mistake made in the performance of professional duties. Since these actions or inactions are excluded in the general liability policy, separate professional liability coverage must be purchased.

Errors and Omissions Insurance–Miscellaneous Coverage

Law Enforcement Liability Coverage

Commercial Auto Coverages

Aviation operations often have a substantial number of vehicles on the premises that may or may not be eligible for coverage under a business auto policy. In addition, vehicles must frequently go off premises to run errands, make deliveries and generally assist in other aspects of the operations. Garagekeepers insurance coverage may also be needed to cover customers’ vehicles left in the care of the insured on its premises.

Auto Medical Payments

Business Auto Coverage

Collision Coverage

Comprehensive Coverage

Garagekeepers Coverage

Hired Cars

Nonownership Automobile Coverage

Uninsured/Underinsured Motorists Coverage

Workers Compensation Coverages

Most employers are required by state statute to provide coverage through a workers compensation policy for on-the-job injuries sustained by their employees. Special rating methods apply when aircraft exposures are involved. If the air facility makes extensive use of independent contractors or subcontractors, certificates of workers compensation coverage from each one should be obtained. This assists in eliminating gaps in coverage when such contractors are injured and then claim to be employees.

Workers Compensation and Employers Liability Coverage

Stop-Gap or Employers Liability Coverage

Federal Employers’ Liability Act (FELA)

Excess and Umbrella Coverages

Typical underlying policy limits are never sufficient to respond to most air-related damages. Appropriate excess limits must be purchased. An excess liability insurance policy may be more effective than an umbrella policy because the excess coverage exactly follows the coverage of the underlying policies.

Excess Liability Coverage

Umbrella Coverage

Aviation Coverages

The coverages described in this area are specific to the aviation needs of classifications within this category.

Air Cargo Coverage

Aircraft Liability Coverage

Aircraft Passenger Liability Coverage

Aircraft Physical Damage (Hull) Coverage

Aviation General Liability Coverage

Civil Air Patrol Coverage

Hangarkeepers Liability Coverage

Specialty Coverages

Aviation operations have specialty exposures similar to other operations but also have unique exposures related to flight. The potential for aircraft to be used in terrorist activities has added to the underwriting concerns. An inventory of activities and exposures should be compiled to determine if coverage under any of the following policies should be considered. Flight schools may especially want to consider student-related coverages and privacy concerns.

Business Legal Expense Coverage

Cyberliability Coverage

Directors and Officers Liability Coverage

Environmental Impairment Liability Coverage

Identity Theft Insurance Coverage

International Insurance Coverage

Risk Retention Group Liability Coverage

Solar Energy System Coverage

Tax Liability Coverage

Terrorism Insurance Coverage

Transportation Brokers Contingent Cargo Coverage

Underground Storage Tank (UST) Liability Coverage

Unmanned Aerial Vehicles (UAV) (Drones)

Weather Coverage