AIRCRAFT AND AVIATION INSURANCE AVAILABLE ENDORSEMENTS
(September 2020)
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Aviation insurance is written by a small group of specialty insurance carriers, so the basic coverage forms are not standardized. Naturally, no standardization exists for the supplemental forms that are used to modify aircraft and aviation policies. While we are unable to supply standard form number references, we can offer some information on typical situations that are the basis of coverage modification in this line of business.
Note: This brief list is not comprehensive. It is meant merely to share information on some coverage form options that are available for various contracts such as:
- Aircraft Policy
- Airport Liability Policy
- Aviation Products Liability
Airline Finance/Lease
Contract Endorsement
Optional coverage which adds protection to parties who have extended loans that financed the purchase of the insured aircraft or parties from whom the aircraft is leased. It protects the listed party up to that party’s financial interest that exists at the time of a loss.
Aviation Products Contractual Liability Endorsement
A coverage option which protects an insured against loss involving obligations to handle losses that are assumed under a written agreement. The insurer must be provided with full details of such agreements. However, it does not cover agreements made prior to the applicable policy effective date, nor does it act as a warranty for the insured’s products or services. The form also obligates the insured to agree to report as requested.
Breach of Warranty Endorsement
A coverage option which protects a lienholder’s financial interest in an insured aircraft in instances where the policyholder has had a loss during a breach of a policy provision.
Note: This form usually gives the insurer the right to then subrogate against the policyholder.
Cargo Legal Liability
Endorsement
Optional coverage that protects insureds against legal liability for damage or loss involving cargo that is handled and transported by the insured via covered aircraft.
Note: The
insured’s level of responsibility for cargo is, typically, defined
contractually.
Civil Air Patrol
(CAP) Endorsement
Optional coverage that protects insured against legal liability for certain activities connected with membership in the CAP, such as piloting emergency transport, search and rescue, or disaster relief missions.
Drone Endorsement
Adds property and liability protection against loss involving damaging property of others or injuring other persons while operating a drone.
Employer's Additional Insured Endorsement
Adds an insured pilot's employer as an additional insured under the aircraft policy.
Fellow Employee Coverage
In those instances where an aviation policy excludes coverage involving loss caused to an employee by another employee, this option adds that coverage back.
Note: The availability of this buyback protection varies significantly by carrier.
Flight Instructor's
Liability Coverage
Liability coverage for loss arising from a pilot's teaching activities.
Guest Voluntary
Settlement
Provides a pre-set payment for loss or injury to specified body parts/limbs that occur due to an aviation-related accident. However, the coverage is available only in exchange when the injured party waives any right to file a lawsuit for their injuries.
Loss of License
Coverage
Protection against loss of earnings caused by an insured’s inability to pilot a covered aircraft due to losing pilot license after failing a medical examination.
Loss of Use Coverage
Business interruption coverage that reimburses insured for earnings loss due to aircraft’s unavailability during time needed to repair or replace it after a covered accident occurs.
Non-owned Aircraft
Liability
Liability coverage against loss involving the insured's operation of an aircraft owned by another entity.
Note: It is generally best to handle this significant exposure under a separate, non-owned aircraft liability policy.
Non-owned
Covers an insured for his or her negligence in causing damage to a non-owned aircraft while he or she is operating that aircraft.
Pollution Liability
Coverage
Liability coverage against certain incidents of cost or
expense caused by accidental release of pollutants.
Property Damage to
Spacecraft
This products hazard form pays for a legal obligation to
respond to damage or destruction of a third party’s spacecraft products that
have been finished by or are being worked upon by an insured. Coverage also
extends to loss of use of such property.
Renter's Liability
Coverage
Liability coverage against loss involving the insured's operation of an aircraft he or she rents/leases from another entity.
Right to Purchase the
Salvage
In instances where a loss to an aircraft is settled as,
essentially, a total loss. This option gives the insured the right to buy the
aircraft back as salvage property.
Road Traffic Accident
Liability Coverage
Liability coverage against loss caused to others (and
others’ property) arising out of an accident occurring on public/private
roadways.
Territorial Extensions
Applies to policies with operating territory limitations. Such endorsements temporarily expand the permitted territory to provide coverage for a given use of the insured aircraft.
Terrorism Coverage
Applies to liability and/or physical damage arising out of aircraft’s exposure to acts of terrorism. Typically, such coverage is available as part of a war risk endorsement.
War Risks Coverage
A package that combines war risk hull and war risk liability protection.
War Risk
Physical damage coverage to an owned aircraft for loss to that craft when the loss involves acts of war, terrorism, and similar causes (such as hijacking).
War Risk Liability
Insurance
Third party liability coverage for operating an owned aircraft for losses caused by that craft's operation which also involves acts of war, terrorism, and similar causes (such as hijacking).