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Do I have personal liability exposure when flying private?

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Bags packed? Check. Passports? Check. Aviation insurance? Check.

And don’t forget to also ask yourself before flying: “Do I have any exposures to worry about?” Consider, for instance, the potential exposures from the four primary ways of flying private:

1. Owned aircraft. Here, you foot all of the expenses associated with the aircraft’s acquisition, maintenance and staffing, along with all of the liability exposures. No doubt you’ll want to have your risk-management and insurance practices accounted for.

2. Private membership. With a private membership, you’re likely flying within the operator’s schedule and sharing the aircraft with other members. You have little more personal exposure than when you fly commercial.

3. Fractional ownership. In this arrangement, you purchase a share of a plane and are granted access to a specified number of flight hours on it or on a comparable plane in the fleet. The fleet operator provides all insurance, which should cover all owners.

4. Chartered aircraft. For a chartered aircraft, you set the schedule and itinerary, which creates a greater exposure to risk.


Before you choose a fractional ownership program or a charter service, it’s important to do your due diligence on the provider. Investigate its safety record, pilot selection, training and maintenance.

Have an experienced aviation attorney review any contracts, including hold-harmless agreements, and the insurance program being provided. Fractional ownership programs typically carry $100 million to $300 million in limits.Charter programs vary greatly.

It’s important to do your due diligence on fractional ownership programs or charter services.


• Your fractional ownership program carries $100 million in limits, and the limits are shared between the entity and the 16 shareholders. The plane experiences mechanical problems and crashes into a populated neighborhood. The entity and each owner are named in multiple lawsuits.

• You charter an aircraft that carries a primary limit of $50 million. You show up for your flight, and your aircraft is out for maintenance and has been replaced with another aircraft. Unbeknownst to you, the replacement aircraft carries a $5 million limit. If it crashes, the primary limit will be easily exhausted and your assets on the line.

• You change the destination of your chartered trip at the last minute. Is the crew familiar with that location and the landing nuances of the destination airport? What time of day will you arrive? What’s the weather like? Are the pilots stressed about the flight plan change? If something happens as a result of your change in destination, you, the customer, may be liable in a contributing manner for setting in motion the events leading to the loss.

• You charter an aircraft, but unbeknownst to you, the aircraft operator isn’t compliant with the terms of its policy. There might be an intentional misrepresentation to the underwriter, or the pilots might not meet the stipulated warranty. If a claim is made on the primary policy under these circumstances, it could be denied by the insurers, leaving you without coverage.


Most personal umbrella insurance policies exclude liability arising out of aircraft-related incidents. If you own a fractional share or you charter regularly, we recommend considering a nonowned aircraft policy. In additional to providing an individual limit of liability, it will give you defense coverage without a conflict of interest between or among the parties.

NFP has access to a number of non owned aircraft policies that may be the right fit for you. As risk and insurance professionals, we strive to protect the assets and lifestyle you’ve earned, so you can fly with comfort and confidence.

Insurance services provided through NFP Property & Casualty Insurance, Inc., a subsidiary of NFP Corp. Doing business in California as NFP Property & Casualty Insurance Services, Inc. (Calif. License # 0F15715).

This article was originally published in the October/November 2016 issue of Worth.

Risk & Insurance

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