Plane Protection: Aviation insurance is a must-have on the ground and in the air.

• Author: Barbour, Tracy
• Position: INSURANCE

Aviation insurance is a critical facet of doing business at Security Aviation. The Anchorage air charter company maintains a fleet of eight aircraft: one Learjet 45, four Cessna Conquests, and three Piper Navajo Chieftans. Each year, Security Aviation's pilots fly 2,500 to 3,000 hours in Alaska, Canada, and the Lower 48, And the company pays approximately $445,000 annually to insure its planes, passengers, and other assets. "It's an expensive cost of doing business," says President and CEO Joe Kapper.

Aviation insurance is vital in Alaska, where airplanes are as commonplace as pickup trucks in Texas. Alaska has six times as many pilots per capita and sixteen times as many aircraft per capita as the rest of the nation.

Types of Aviation Insurance

Aviation insurance is geared specifically to the operation of aircraft and the risks involved in the aviation industry, but what determines the insurance needs of an aviation company varies, according to Lee Bridgman, a small business account executive at RISQ Consulting. As a full-service insurance broker and Acrisure agency partner, RISQ Consulting has extensive access to aviation insurance markets. The factors that impact insurance needs include the type of services that the company provides, kind of aircraft owned, number of passengers transported per aircraft, the type of cargo that is carried, where the aircraft normally operates (major airports, remote airports, or Bush facilities), and the aircraft's use (scheduled or charter operations).

There's a range of aviation insurance available, but the most important kind of coverage is aircraft liability, Bridgman says. Aircraft liability provides coverage to others for bodily injury or property damage in the event of an "occurrence" that the insured is legally obligated to pay for. "An occurrence can be anything from an 'in-flight event' to a taxiing event or even a plane being blown into another aircraft during a windstorm," he explains. "While this coverage provides coverage for others, it also provides coverage for any passengers as a sub-limit as defined in the passenger bodily liability limit."

However, Bridgman points out that commercial operations may have their liability limits or other coverages dictated by contractual commitments.

Other lines of coverage that could be a part of an aviation company's policy are passenger bodily liability, medical expense, hull coverage, ground-not-in-motion, and cargo and baggage.

Passenger bodily liability, as the term indicates, provides payment for a passenger's bodily injury for which the insured is legally obligated due to an occurrence arising out of the ownership, maintenance, and use of the aircraft...