CFI insurance

Discussion in 'Flight Following' started by Tristar, Aug 27, 2015.

  1. Tristar

    Tristar Pattern Altitude

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    Hi everyone,

    I'm getting back into flight instructing part time but this time it will be freelance. A few things are a bit unfamiliar to me insurance being one of them. Basically the airplane does have insurance but that doesn't mean the insurance company can't come after me and my student and I have no insurance. There's no way I can afford enough insurance to cover medical costs if we get into a severe accident nor can I fully prevent/cover him/her from a solo taxi into Trumps million dollar jet. I'm worried about this despite the understanding I have no assets for anyone to take. Someone can still come after me out of anger or just because they can. What do you other CFIs do?
     
  2. taters

    taters Pattern Altitude

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    Hi Tristan I know a lot of CFI's use the NAFI product.
    I never carried anything when I was more active but I'm in no way saying that's good advice . ( I carry mucho life insurance and loss of license insurance now )

    I can tell you that an insurance company wouldnt subrogate against an instructor without a preponderance of almost malicious circumstances .

    In today's anybody can sue anybody world ...sometimes you just have to weigh the cost and rely on your professional instincts ....
     
  3. James331

    James331 Ejection Handle Pulled

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    Just get this.

    https://www.avemco.com/secure/cfi-nonowned-aircraft-insurance.aspx


    If you have no assets I doubt a lawyer is going to really bother with you, they'll just take what they can from AVEMCO.

    If you're almost judgement proof, I wouldn't bother overthinking this.

    Not a lawyer, nor did I stay at a quality inn last night, just a thought.
     
  4. bradg33

    bradg33 Pattern Altitude

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    As a CFI, you're exposed on a couple levels. First, you've got some exposure to claims related to the operation of the airplane while you're in it. This can be covered with a CFI non-owned policy with liability and hull coverage, essentially a renter's policy for CFIs. Second, depending on the state and circumstances, you might have some exposure for "instructional liability" for accidents that happen when you're NOT in the airplane (student solo, pilot you recently gave a checkout/BFR/IPC to, etc.). Keep in mind that many states do not recognize a cause of action for "educational malpractice," which is what those claims really are. In other words, in most states, you can't be held liable for giving "bad" instruction that allegedly results in an accident. Of course, it does depend on the particular state you're giving instruction in. If you're genuinely concerned about that, talk to a local aviation attorney.
     
  5. Theboys

    Theboys Line Up and Wait

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    Hello Tristan. I'm pretty sure In this case you are a named pilot on the insurance on all instructional planes. That should cover most if not all of what you are needing I'm thinking. However insurance is pretty cheap when you need it. More is good sometimes,but, maybe not necessary.
     
  6. bradg33

    bradg33 Pattern Altitude

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    Keep in mind there is a BIG difference between "named pilot" and "named insured." As a named pilot, the owner's coverage will protect the owner and generally keep the insurance company from subrogating against the named pilot. It does NOT provide the named pilot with any protection or defense against lawsuits from passengers or those injured on the ground. As a "named insured," the pilot is entitled to the full benefits of the policy, including liability protection and the duty to defend. As a "named pilot," you probably still want your own liability coverage. As a named insured, it's probably unnecessary unless you believe the owner's coverage to be inadequate.
     
  7. Theboys

    Theboys Line Up and Wait

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    Good point. I think in this case though the insurance company knows these planes are used for instruction and rental and pilots are named insured same as owner. Myself, I have my regular insurance on things I own, plus I carry a blanket liability policy. She stated she doesn't have assets she needs to cover however. I think at this time she really doesn't need more insurance, but, saying that having extra insurance is never a bad thing.
     
  8. Tristar

    Tristar Pattern Altitude

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    Yes I'm a named pilot, not named insured.
     
  9. bradg33

    bradg33 Pattern Altitude

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    Not saying it's impossible, but that would be unusual. Typically, in an FBO/flight school situation, renters and instructors are "named pilots" at best, and usually they aren't even named, but operate via an open pilot warranty. Operating under the open pilot warranty doesn't provide much protection from subrogation, either. In order from worst to best in terms of protection:

    1. Operating without insurance approval (not named, no open pilot warranty, etc.);
    2. Open pilot warranty (protects owner, little to no protection to renter/pilot);
    3. Name pilot (protects owner, makes subrogation against pilot unlikely);
    4. Named insured (protects owner and pilot to full extent of policy).
     
  10. bradg33

    bradg33 Pattern Altitude

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    As a named pilot, it's unlikely (though not impossible) that the owner's insurance would subrogate against you to recover their losses. But, as a named pilot, you are not entitled to any of the protections of the insurance policy. If you get sued for your role in the accident, you have ZERO coverage under the owner's policy. If you don't have your own insurance, you're on the hook for your own defense costs and any judgment.

    For someone with few assets, insurance may seem like a waste, but the real benefit in that situation is the duty to defend. Even if you have no assets, you may still get sued (plaintiffs' lawyers tend to just sue everyone). Defending that suit will cost money, a lot of it. Even if you can talk the plaintiff's lawyer into letting you out for a nominal payment (show that you're judgment proof), you'll incur a LOT of attorneys' fees. If you have insurance that actually covers you (your own policy or a named insured on someone else's policy), the insurance company will hire and pay your lawyer.
     
  11. Theboys

    Theboys Line Up and Wait

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    I actually called insurance company on this as it is a very good question. As close as we can come at this time is that the cfi is in fact covered as basically a employee as they are providing a service which directly impacts owner of airplanes. Even though this person is not considered a employee by any state or federal application. Still not saying separate insurance is a bad idea. Was also said that unless there was obvious malfecence they would not subrogate.
     
  12. bradg33

    bradg33 Pattern Altitude

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    "Basically" an employee is not an employee. I'd also be very hesitant in trusting verbal statements made by your insurance broker (I'm assuming you're not actually speaking with the underwriter). Ask them to put, in writing, that your non-employee instructors (independent contractors?) are considered "named insureds" under the policy; I bet they wont't.
     
  13. ronnieh

    ronnieh Cleared for Takeoff

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    That would not be a bet. A bet implies some sort of risk or chance. That sir is a sure thing!
     
  14. LDJones

    LDJones Touchdown! Greaser! PoA Supporter

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    :yeahthat: (And I am a lawyer.) join NAFI and do the Avemco insurance. The main thing you want is defense costs which this will buy you. If you have little to go after they'll take what Avemco offers and will go away.

    If one lives their life paralyzed by what-ifs it can be a miserable existence.
     
  15. MikeELP

    MikeELP Pattern Altitude

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    SAFE also provides discounts to members with insurance through Starr. Good non-owner/CFI coverage for single and multi engine at a good price.

    Best thing to do is join SAFE or NAFI and take advantage of the discount provided. My insurance discount through SAFE is more than the annual dues (I would imagine same with NAFI) so it's a no-brainer not join.

    JMHO
     
    Last edited: Aug 27, 2015
  16. Theboys

    Theboys Line Up and Wait

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    My policy says under special requirements for pilots, that any current cfi who is named on the policy is cleared to operate for business and pleasure. Couple other paragraphs supporting this and several defining renters.