CFI/CFII Liability?

[Kristin]

This is a good discussion on the subject. For the casual instructor providing training to owners in their own aircraft, insist on being listed on the owner/pilot's insurance as an "additional insured". Don't let them merely name you as a pilot because contrary to popular belief, that does not cover you. You are fairly well protected with this, though having your own insurance is better.

If you are working for an FBO, make sure that you are on their insurance. If you are a regular W-2 employee, then you are covered on their policy, assuming they have a policy.

I agree with the discussion on incorporating. It only helps for liability if someone else is flying your plane or working for you.

Liability and hence exposure does vary state by state. Some states have limitations on liability for educational malpractice. Minnesota is one. One problem with allowing unliked educational liability is that then everyone who flunks out could potentially sue the local government.

BTW, I am an aviation attorney as well as a CFIAIM.

 

[poadeleted20]

This is a good discussion on the subject. For the casual instructor providing training to owners in their own aircraft, insist on being listed on the owner/pilot's insurance as an "additional insured". Don't let them merely name you as a pilot because contrary to popular belief, that does not cover you. You are fairly well protected with this, though having your own insurance is better.

As noted above, even though s/he may be an additional named insured, a paid instructor giving training to the policy holder is usually specifically excluded from the protection normally provided an additional named insured on the policy. As Mark noted above, this protection for the instructor generally requires a special endorsement, which might cost extra. Do not rely on this supposed protection unless you have read the policy and see that it is not excluded.

 

[Kristin]

Being on the policy as an expressly named "additional insured" provides that protection. Sometimes there is extra cost to the owner, and sometimes not.

Do you have an example of a policy that has been interpreted to mean that if the "additional insured" CFI is giving instruction to the named insured owner, that there is no coverage. I have been involved with insurance defense and coverage issues for a dozen years and I haven't seen this scenario. I think there is confusion about the normal exclusion that keeps an owner, or additional insured, from giving instruction in that aircraft to third parties.

 

[poadeleted20]

Do you have an example of a policy that has been interpreted to mean that if the "additional insured" CFI is giving instruction to the named insured owner, that there is no coverage.

Mark has already quoted policies with this exclusion.

 

[flyingron]

I've only seen four such policies offered (Avemco, Falcon/NAFI, SAFE, and AOPA), and all but Avemco include instructional liability.

Actually the NAFI is the Avemco currently. While it does, it has pathetically low policy limits. The SAFE does NOT provide coverage other than when you're in the plane (though it max marginally higher limits). Similarly for AOPA (with lousy limits as well). My neighbor/CFI was sued for $2MM. None of these polices would have been sufficient.

 

[weilke]

My neighbor/CFI was sued for $2MM. None of these polices would have been sufficient.

Did he end up paying 2mil ?

The policy would have paid his defense an even with a unfavorable verdict probably concluded with a settlement at the policy limits.

 

[Kristin]

Mark has already quoted policies with this exclusion.

Unless it was in another thread, no one has quoted the actual language of any policy and identified which policy it came from.

I know of no policy that will not protect a CFI who is expressly named as an "additional insured" who is giving instruction in that aircraft, to a named insured. It would be self-defeating for the insurance company to write and enforce their policy that way because they want their insureds to obtain regular recurrent training. That is in their best interest.

 

[Kristin]

Did he end up paying 2mil ?

The policy would have paid his defense an even with a unfavorable verdict probably concluded with a settlement at the policy limits.

Plaintiff's attorneys are loath to go after a CFI unless there is cash to gotten. They don't want to have to foreclose and sell assets to get their money. They know what can be shielded in bankruptcy, which varies state by state. A CFI is really exposed to the extent that s/he has assets that can be readily converted to cash that are not part of a formal retirement plan. If you have a millions bucks in the bank, it would be at risk. Your home, not so much.

The point is to have insurance so that you have your defense paid for and a large enough bone that the case can settle within the policy limits. I carry $100K for the hull and $1M with a $100K sublimit for passengers. If I was instructing regularly to people with whom I was not very familiar, I would have the student and any passengers that were in the plane sign a hold harmless agreement that said that they would limit any claims against me to the value of any insurance policies.

 

[Kristin]

I've only seen four such policies offered (Avemco, Falcon/NAFI, SAFE, and AOPA), and all but Avemco include instructional liability.

Falcon and AOPA do not write insurance. They are merely brokers. The policies come from an actual insurance underwriter. SAFE is a plan underwritten by Chubb. Avemco is an actual insurer.

These may, and I expect do, have an exclusion for providing instruction to third parties using the insured aircraft. That is not the same thing as saying that it will not cover the "additional insured" CFI who is teaching the owner/named insured in their own aircraft.

 

[weilke]

If everything else fails, read the policy.

 

[poadeleted20]

My neighbor/CFI was sued for $2MM.

For what? Successfully? Details, please. Just being sued means nothing, and the $1M liability coverage I have with my Falcon policy would be sufficient ten times over and then some to mount a defense in an instructional liability case.

 

[Kristin]

Assuming you can understand the policy and interpret any ambiguities in the light of insurance coverage law.

 

[RotorAndWing]

In the US there are 1,225,452 licensed attorneys (April 2011 numbers,ABA).

Many are "bottom dwellers" looking to make a quick dollar and are willing to roll the dice for the cost of a filing fee and a few other fees. Since the US doesn't have a "loser pays" system for some, if not most it's worth the fishing expedition in hopes of getting an insurance payoff or out of court settlement.

You can be sued for anything (US), all it takes is a creative lawyer. Even if it's frivolous you still have to hire an attorney to defend you and that's not free.

In the end with all of these lawsuits the only real winner are the lawyers.

 

[NovemberZulu]

Reading this thread with interest since I hope to become a CFI someday.

Anyway, here's my question. I usually show up for my lesson, do a thorough preflight, then go meet my instructor to go over any ground instruction before our flight. When we go down to the plane together he will usually do a very brief walkaround, but not always. If something were to happen, would he be liable for not doing a preflight inspection? Do most instructors do a walkaround after their student?

 

[Kristin]

In the US there are 1,225,452 licensed attorneys (April 2011 numbers,ABA).

Many are "bottom dwellers" looking to make a quick dollar and are willing to roll the dice for the cost of a filing fee and a few other fees. Since the US doesn't have a "loser pays" system for some, if not most it's worth the fishing expedition in hopes of getting an insurance payoff or out of court settlement.

You can be sued for anything (US), all it takes is a creative lawyer. Even if it's frivolous you still have to hire an attorney to defend you and that's not free.

In the end with all of these lawsuits the only real winner are the lawyers.

Yup! I have make a fair amount of money making BS lawsuits go away. That is why you have to have insurance, even it you are pretty suit proof. You need to be able to call the insurance company and let them provide a lawyer to run interference. It is like hiring the Orkin man, except that defending a lawsuit can easily run into the seven figures and just answering a complaint and doing minimal stuff to get a settlement can easily cost $25K. That is why you buy insurance.

 

[Kristin]

Reading this thread with interest since I hope to become a CFI someday.

Anyway, here's my question. I usually show up for my lesson, do a thorough preflight, then go meet my instructor to go over any ground instruction before our flight. When we go down to the plane together he will usually do a very brief walkaround, but not always. If something were to happen, would he be liable for not doing a preflight inspection? Do most instructors do a walkaround after their student?

It would depend on the jury. If it was a primary student, probably if the pre-flight missed something that would have been obvious to the instructor. If your student was a 10,000 hour pilot adding a multiengine instructors rating, maybe not.

If you are reasonably cautious and document what you do with your students, you dramatically reduce your exposure to a bad verdict. But as has been pointed out, you can get sued anyway. Some attorneys will sue everyone, just to see if someone will give them some money to go away.

The bigger risk is pranging the owner's aircraft and then having him blame the instructor or having his insurance company come after you for the repair cost, though most of the insurers choose not to go after the instructor unless it is super egregious.

 

[midlifeflyer]

Unless it was in another thread, no one has quoted the actual language of any policy and identified which policy it came from..

I already suggested reading the sample AVEMCO policy available on line. You want me to read it for you also? You don't need to go any further than the definition section. Combe the definition of what is an "insured person" with the definition of an "aviation business." What do you think? Is a CFI giving flight instruction for hire an "insured person" under the policy?

 

[Kristin]

I already suggested reading the sample AVEMCO policy available on line. You want me to read it for you also? You don't need to go any further than the definition section. Combe the definition of what is an "insured person" with the definition of an "aviation business." What do you think? Is a CFI giving flight instruction for hire an "insured person" under the policy?

I didn't catch that. I did catch that someone else seemed to suggest that Avemco was an exception, so I didn't rush right out to read the policy.

Having done so, I can say what I have said, a CFI would not be automatically covered. The CFI would have to be expressly listed as an "additional insured". This is what I have said all along. Being an approved pilot is not enough in any insurance policy with which I am aware. That only means that the insurance policy covers the owner if an approved pilot prangs it or hurts someone.

Now I have been told by more than one claims attorney for different insurance companies that they don't typically go after CFI's, even if they are not listed on the policy as an "additional insured" because as a matter of policy, they do not what to discourage owners from getting additional and recurrent training.

 

[PPC1052]

Choose your students wisely.

This might sound trite and obvious, but my wife and I would *never* sue our CFII. I'll just leave it at that.

Its a good thought, but it may not be the student deciding whether to sue or not, particularly if the student is dead or incapacitated as a result of the incident.

 

[Art VanDelay]

Makes me wonder then if a high net worth CFI should go to the trouble that some doctors do of creating the illusion that they have no "personal" assets ?

 

[PPC1052]

Won't make a bit of difference for liability purposes if you're the only instructor in that corporation. Corporate entities do not shield you from the consequences of your own actions, only the actions of others in that corporation.

And that only if you are sure to follow the corporate form and not treat it as just an alter ego. That means keeping the accounts separate, corporate minute books, resolutions, etc.

Many folks screw that up, particularly where they are the sole owner of the corporation or sole member of the LLC.

 

[midlifeflyer]

I didn't catch that. I did catch that someone else seemed to suggest that Avemco was an exception, so I didn't rush right out to read the policy.

Having done so, I can say what I have said, a CFI would not be automatically covered. The CFI would have to be expressly listed as an "additional insured".

How would listing the CFI as additional insured change an insured being specifically not an insured when giving flight instruction for hire?

If someone owns an airplane, purchases the policy, is the only "insured" and pays all the premiums, even he or she is not covered if also a CFI and giving flight instruction for hire in his or own airplane. (Or are you saying that a CFI who teaches in his or her own airplane doesn't need a commercial insurance policy, just the standard owner's one?)

I don't think AVEMCO is an exception. It could have changed since but I read the AOPAIA owners policy to specifically check for that a few years ago ( was a named insured in a client's policy as well as an aircraft co-owner using one) and, while the phrasing was different, the exclusion was definitely there.

 

[midlifeflyer]

Makes me wonder then if a high net worth CFI should go to the trouble that some doctors do of creating the illusion that they have no "personal" assets ?

That type of financial planning is not limited to physicians and there are definitely flight instructors who have had it done.

 

[PPC1052]

Insurance pays for your defense and if you lose will pay damages up to policy limits. If you have $1M in coverage and get a $3M judgment against you guess who pays the other $2M?

Hard to say who. It might be the malpractice carrier for the defense attorney who handled the claim. It might be your insurance carrier who failed to settle within the policy limits when they had the chance. It might be the trustee of your bankruptcy estate. Or it might drag on as the plaintiff's attorney has to go to proceedings supplemental looking for asset that might be attached to satisfy the judgment.

There are no guarantees, but generally plaintiff's attorneys just want the easy cash of the insurance proceeds. They hold the threat of an excess judgment against the insured to get the carrier to pony up their limits, or as much as they can get. There is a reason why 95% of cases are settled short of trial.

 

[PPC1052]

I had a case involving a mid-air. CFII with instrument student took off in a flying club airplane, and hit an incoming plane. It was a mess. The student's family sued instructor and the other pilot. The other pilot sued the student and the instructor, and the instructor sued the other pilot. And by that, I mean their estates were the ones suing. We just had the flying club, and the carrier offered up its measly seat limits, even though there was no allegation of anything wrong with the plane, or any articulable claim of negligence on the part of the club.

 

[midlifeflyer]

I had a case involving a mid-air. CFII with instrument student took off in a flying club airplane, and hit an incoming plane. It was a mess. The student's family sued instructor and the other pilot. The other pilot sued the student and the instructor, and the instructor sued the other pilot. And by that, I mean their estates were the ones suing. We just had the flying club, and the carrier offered up its measly seat limits, even though there was no allegation of anything wrong with the plane, or any articulable claim of negligence on the part of the club.

Just wondering...

No claim was being made that the Club was the de facto employer of the instructor or that the student was an insured covered by the club's policy? In either of those situations, even if you were representing only the club and there was no direct claim against it regarding the aircraft itself, I can see the club's insurer tossing in the policy limits.

 

[PPC1052]

The student's estate did try to claim that the instructor was an employee of the club, subjecting it to vicarious liability under the doctrine of respondeat superior. I filed a summary judgment motion on the issue. The estate attempted to argue that because the club limited who could provide flight instruction, it excercised the requisite control such that a question of fact existed on the issue. The case settled (at least as to us) before there was final ruling from the court.

For what its worth, they also sued the FBO and the city that owned the airport, which just goes to show that with $150.00 and a piece of paper, you can sue anyone. Their claim was that the city knew that the other pilot frequently flew in an unsafe manner, represented that it would not tolerate such unsafe conduct, and therefore should have prevented the other pilot from acting in an unsafe manner. (His medical was expired.)

 

[JimNtexas]

The student's estate did try to claim that the instructor was an employee of the club

This EXACTLY why our club does not have an 'approved instructor' list, and very few other rules beyond 'follow the FARS'.

When I see an ownership club with a bunch of extra rules and list of approved CFIs I shake my head in wonder.

Because in court breaking your own rules shows just as much, if not more, negligence than might otherwise exist.

Likewise, if your club says 'this instructor is our guy', then to a lot of potential judges and juries your club now shares whatever responsibility the instructor might obtain.

 

[poadeleted20]

This EXACTLY why our club does not have an 'approved instructor' list, and very few other rules beyond 'follow the FARS'.

It's a balancing act of risk/return. The downside of that plan might be higher insurance rates even if there are specific instructor qualifications listed. Club management has to do the research to figure out what all the options are along with what each one will cost versus what it provides.

 

[PPC1052]

Likewise, if your club says 'this instructor is our guy', then to a lot of potential judges and juries your club now shares whatever responsibility the instructor might obtain.

Yeah, to a soft-headed decision-maker. I attempted to argue that limiting instruction to certain club member CFIs didn't equate to control akin to that required for respondeat superior liability anymore than simply choosing who you willingly loan your car to makes the driver of your car an employee. Of course, trial judges are so afraid to grant summary judgment, they often are just looking for any reason to deny, and hope the parties settle (fearing the risk and expense of trial) so there is no chance of a reversal. Everyone then wrings their hands about the stupid lawyers filing too may lawsuits, and judges complain about how overworked they are. If judges would throw out the crap cases, lawyers would stop filing them, and the court system wouldn't be so log-jammed.

 

[PPC1052]

It's a balancing act of risk/return. The downside of that plan might be higher insurance rates even if there are specific instructor qualifications listed. Club management has to do the research to figure out what all the options are along with what each one will cost versus what it provides.

I would also note that it settled based on insurance payments only. The club didn't have to kick anything in. So, in the grand scheme of things, did it cost the club much other than a little hassle in answering discovery and talking to their attorneys? Probably not. These people were going to sue anyone and everyone. And they did.

 

[weilke]

It's a balancing act of risk/return. The downside of that plan might be higher insurance rates even if there are specific instructor qualifications listed. Club management has to do the research to figure out what all the options are along with what each one will cost versus what it provides.

'An instructor approved by our insurance company'.

 

[PPC1052]

One question: What's the liability of a CFI/CFII? Anything written into the law to limit liability?

If nothing else, you can generally file for bankruptcy. (assuming you didn't intentionally harm the agrieved.) How much of your bankruptcy estate you can protect varies by state. I hear Florida has some favorable rules.

 

[Kristin]

How would listing the CFI as additional insured change an insured being specifically not an insured when giving flight instruction for hire?

If someone owns an airplane, purchases the policy, is the only "insured" and pays all the premiums, even he or she is not covered if also a CFI and giving flight instruction for hire in his or own airplane. (Or are you saying that a CFI who teaches in his or her own airplane doesn't need a commercial insurance policy, just the standard owner's one?)

I don't think AVEMCO is an exception. It could have changed since but I read the AOPAIA owners policy to specifically check for that a few years ago ( was a named insured in a client's policy as well as an aircraft co-owner using one) and, while the phrasing was different, the exclusion was definitely there.

The CFI would only be covered under the policy if s/he was an "additional insured" and either flying the airplane for s/he own business and pleasure use or was giving instruction to the owner/policyholder.

Remember that this issue came up in the limited context of how to give instruction to an aircraft owner without buying one's own CFI coverage. The answer was to have the owner get you added to his/her policy as an "additional insured."

The underlined statement is correct.

 

[Kristin]

Yeah, to a soft-headed decision-maker. I attempted to argue that limiting instruction to certain club member CFIs didn't equate to control akin to that required for respondeat superior liability anymore than simply choosing who you willingly loan your car to makes the driver of your car an employee. Of course, trial judges are so afraid to grant summary judgment, they often are just looking for any reason to deny, and hope the parties settle (fearing the risk and expense of trial) so there is no chance of a reversal. Everyone then wrings their hands about the stupid lawyers filing too may lawsuits, and judges complain about how overworked they are. If judges would throw out the crap cases, lawyers would stop filing them, and the court system wouldn't be so log-jammed.

Here! Here! At least here in California.

 

[PPC1052]

This EXACTLY why our club does not have an 'approved instructor' list, and very few other rules beyond 'follow the FARS'.

Yeah, to a soft-headed decision-maker.

Let me be clear, I wasn't saying YOU were soft-headed. I completely get where you are coming from. My point was really that there are soft head-ed judges and juries that might fall for that argument. I hope I did not come off as insulting to you, because that was not my intent.

 

[JimNtexas]

It's a balancing act of risk/return. The downside of that plan might be higher insurance rates even if there are specific instructor qualifications listed.

Avemco says nothing about instructor qualifications in our policy, and I doubt if they would lower the price if we somehow could identify 'better' instructors.

In fact, Avemco says that a CFI who has never flown a Cardinal RG can check us out in our Cardinal RG. Which is kind of weird when you think about it. Especially with a quirky airplane like the C177.

 

[ahartley]

Because there is inherent benefit in getting instruction, even in a plane the instructor may not be specifically familiar with, beyond learning the aircraft itself - like airmanship, decision-making, etc. Recurrent & review of information an owner may not have looked at or thought about in quite awhile has benefits that last well beyond the time of instruction.

 

[PPC1052]

In fact, Avemco says that a CFI who has never flown a Cardinal RG can check us out in our Cardinal RG. Which is kind of weird when you think about it. Especially with a quirky airplane like the C177.

This just depends on the underwriter making the call on your specific application. Our Avemco underwriter (when we were still insured by them) required that I get instruction from a CFI with experience in a 177 prior to my solo use of our 177B fixed gear.

 

[poadeleted20]

Avemco says nothing about instructor qualifications in our policy, and I doubt if they would lower the price if we somehow could identify 'better' instructors.

In fact, Avemco says that a CFI who has never flown a Cardinal RG can check us out in our Cardinal RG. Which is kind of weird when you think about it. Especially with a quirky airplane like the C177.

I think perhaps you should talk to your insurance carrier about this. Despite your doubts, it's possible you could save some money if you're willing to be have more stringent instructor qualification requirements.