Instruction Questiosn

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Unitedcap

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Unitedcap
Hey Guys!

So i have just earned my CFI and want to start doing freelance instruction. My friend is letting me use his plane for the cost of gas. I have non-owners insurance. However, what steps should I do to protect my self and his plane.

I'm going to start an LLC, however, the plane will not be part of that. I'm guessing I should get Instructors Insurance?

Any help would be great guys.

Thanks!!!
 
Unitedcap said:
Hey Guys!

So i have just earned my CFI and want to start doing freelance instruction. My friend is letting me use his plane for the cost of gas. I have non-owners insurance. However, what steps should I do to protect my self and his plane.

I'm going to start an LLC, however, the plane will not be part of that. I'm guessing I should get Instructors Insurance?

Any help would be great guys.

Thanks!!!
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Starting an LLC will do nothing to protect you for liability for your own negligence. Talk to an insurance broker, tell him what risks you want to insure against, and see what coverage is available. Also, be completely honest with the broker, because any misstatement/lie in placing the coverage can be a reason to deny coverage after the loss occurs.
 
You'll need airplane insurance specifically for flight instruction. It's considerably more expensive than your non-owned renter insurance, but unlike the non-owned renter policy, it will cover the airplane during commercial flight instruction.

You should also consider flight instruction insurance that covers professional liability. NAFI and SAFE both offer good policies at a discount.
 
Depending on how much the aircraft is operated, don't forget about the 100 hour inspection!
 
PPC1052 said:
Starting an LLC will do nothing to protect you for liability for your own negligence. Talk to an insurance broker, tell him what risks you want to insure against, and see what coverage is available. Also, be completely honest with the broker, because any misstatement/lie in placing the coverage can be a reason to deny coverage after the loss occurs.
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Yeah that. What you should look into is an umbrella policy to protect your assets.
 
I would have your friend talk to an insurance agent,to be sure his assets are covered.
 
Your friend has absolutely no insurance if you're using his airplane to give instruction in and he doesn't have an insurance policy that specifically permits that. A standard policy will prohibit it.

The proper insurance policy will cost anywhere from about 2 to 5 times as much as the policy he currently has.

Your own non-owned policy is not your friends insurance policy and does not insure your friend. It insures you.
 
I used to have my students pull a AVEMCO renters policy to go along with the planes normal AVEMCO policy.

The only hole I remember is if the plane goes down because of a malfunction, neither policy cover it.

Insurance is a gamble, you need to look at your risk, what you have to loose and go from there.


You also could potentially not need a 100hr if they are paying your friend and you totally separate.
 
cgrab said:
It's hard to get an umbrella policy that covers aviation.
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You don't need to get one for aviation, just one that covers where the instructor policy ends so they don't get your house, etc., in a lawsuit.
 
James331 said:
I used to have my students pull a AVEMCO renters policy to go along with the planes normal AVEMCO policy.

The only hole I remember is if the plane goes down because of a malfunction, neither policy cover it.

Insurance is a gamble, you need to look at your risk, what you have to loose and go from there.


You also could potentially not need a 100hr if they are paying your friend and you totally separate.
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Unless the airplanes normal AVEMCO policy specifically covers dual instruction being given by the instructor and being received by the pilot at hand there are tons of holes in this.

1. The renters insurance insures the renter, not the owner of the aircraft. If an incident occurs they're not going to just automatically pay without the owner proving that it was the fault of renter. The owner's insurance company isn't going to do this for him as they weren't insuring the operation what so ever. Lets say that the crank fails and the student totals the airplane trying to put it down safely. Owner is going to be **** out of luck because it wasn't the renter's fault and the owner has no insurance.

Perhaps a tire blows out on landing, the renter loses control, goes off the runway, and bends the airplane all to hell. Was this really the fault of the renter? Or was this the fault of the tire not being properly maintained? Most likely the renters insurance company will say that it was not the renters fault therefore they're not paying. You could try to sue the renter, but the renter has insurance and they will defend them. You're in a bad spot as the owner...

2. If the renter causes a liability damage, lets say that they taxi it into a jet, or they crash it into a car and kill themselves and a bunch of people. This will be a VERY bad day for the owner as the owner will be sued as well and the owner will have absolutely no liability protection.

3. Many other reasons this is a bad idea. You have to picture it as the owner not having any insurance, because, the owner has no insurance if the operation isn't covered. Renter's insurance is not the owner's insurance. The owner does not get liability protection from the renter's policy and the owner does not get hull protection from the renter's policy. The renter gets coverage incase the owner can make a claim against the renter for damage at fault of the renter..but if it's not super obvious..it's going to be a battle to get paid.
 
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In addition to having a long talk with an insurance broker about the issues for both you as the instructor and the aircraft owner as the aircraft provider, you should find out whether there are any state, local, or airport business rules with which you must comply, including possible sales tax issues on the airplane rental. That may require discussions with a local attorney who works with small retail business operations. And as noted above, the airplane will almost certainly need 100-hour inspections unless the trainees are renting it directly from the owner and you are providing instruction completely independently from the owner and the rental of that aircraft.
 
jesse said:
Unless the airplanes normal AVEMCO policy specifically covers dual instruction being given by the instructor and being received by the pilot at hand there are tons of holes in this.
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A specific policy may have endorsements to vary it, but the "normal" AVEMCO policy (I had a reason to review one recently) includes CFIs giving instruction to an "approved pilot" in its definition of "approved pilots", so the AVEMCO policyholder is generally protected when receiving instruction. (The policyholder, not the CFI.)
 
midlifeflyer said:
A specific policy may have endorsements to vary it, but the "normal" AVEMCO policy (I had a reason to review one recently) includes CFIs giving instruction to an "approved pilot" in its definition of "approved pilots", so the AVEMCO policyholder is generally protected when receiving instruction. (The policyholder, not the CFI.)
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...and not the trainee, either, unless the trainee is the policy holder or is an "additional insured" as well as an "approved pilot".
 
midlifeflyer said:
A specific policy may have endorsements to vary it, but the "normal" AVEMCO policy (I had a reason to review one recently) includes CFIs giving instruction to an "approved pilot" in its definition of "approved pilots", so the AVEMCO policyholder is generally protected when receiving instruction. (The policyholder, not the CFI.)
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I assumed (maybe wrongly so) that Jesse's use of "pilot at hand" didn't refer to the owner or "approved pilot", but rather the guy off the street getting instruction in the owner's airplane.:dunno:
 
Ron Levy said:
...and not the trainee, either, unless the trainee is the policy holder or is an "additional insured" as well as an "approved pilot".
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In the "normal" AVEMCO owner policy, an "approved pilot" is an "insured person." It's even broader than that with anyone using the aircraft with the owner's permission defined as an "insured person."

But, like the FAR, the inquiry doesn't stop with one sentence.
 
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MauleSkinner said:
I assumed (maybe wrongly so) that Jesse's use of "pilot at hand" didn't refer to the owner or "approved pilot", but rather the guy off the street getting instruction in the owner's airplane.:dunno:
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In the "normal" AVEMCO policy, "approved pilots" are those who are flying the aircraft with the owner's permission and at least meet the open pilot warranty.

Bear in mind, that's not necessarily the case with your policy, even if it is from AVEMCO and that even if covered by the definition of "approved pilot" there will be other provisions that apply. In the instruction situation, that's particularly true of the general policy exclusion when the aircraft is being used for a "commercial purpose" or in an "aviation business." IOW, you can be an "approved pilot," even an "insured person" but have no policy protection because other terms of the policy were violated.

It's actually a very good example of the fact that, unlike car insurance which is heavily regulated by the state, aviation policies and their terms are not uniform and even similar terms may be defined differently. They have to be read and understood (the latter is not always easy).
 
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