Insurance and the independent CFI

[Greg Bockelman]

Ok, this is for all you CFI's out there that are part timers and independent CFI's.

What do you guys do about insurance? Assuming you are instructing in someone else's airplane. You can get CFI insurance that will cover you from liability. I was quoted about $685 per year for that coverage. But that does not provide coverage for property damage. You can get a rider on the CFI insurance that would cover a $5,000 deductible for another $50 or so. But unless you are instructing more than just part time, it does not make financial sense to have this coverage because you cannot make enough part time to cover the insurance.

You can get Renter's insurance, but in my case, it won't cover if I am providing instruction.

So...

As I see it, there is no way I can be adequately covered. Renter's insurance won't cover me. CFI won't cover me from property loss. And the rider only covers the deductible.

What can I do as an independent CFI to make sure I am covered? What is an independent CFI to do???

 

[bbchien]

I use a NAFI policy. It's nearly twice as expensive, 75K hull and 500K liability. Not much coverage.

 

[Greg Bockelman]

I use a NAFI policy. It's nearly twice as expensive, 75K hull and 500K liability. Not much coverage.

Yeah. Financially, I am better off not instructing.

 

[poadeleted20]

I use the NAFI/Falcon CFI policy, costs me $1300 a year for the hull/liability coverage I want, but as much exposure as I have as a working instructor, I can't afford not to have it. And I get about a third of that back from the Fed/state governments, anyway.

 

[bbchien]

Yeah. Financially, I am better off not instructing.

Yup. That's how it is.... You should see the books when I do MEI transition. The policy for that is $650 per MONTH.

 

[midlifeflyer]

Yeah. Financially, I am better off not instructing.

You're right. If you can't afford basic insurance coverage you probably should not engage in the business.

I sort of look at it this way. I fly rental airplanes also so I want rental insurance anyway. CFI insurance is pretty much rental insurance with a CFI coverage rider / endorsement. I haven't compared in a while, but the last time I checked the real cost to me of the CFI insurrance was less than $100.

 

[RotorAndWing]

Yeah. Financially, I am better off not instructing.

One of the reasons I gave it up. Another prime consideration not to Instruct is if you make your living as a Professional Pilot not to expose yourself to the "FAA Liability". A certificate action on your CFI could easily result in also removing your ATP while being resolved, thus putting you out of work.

This happened to one of my coworkers who went almost a year off the payroll. Also my attorney advised me of the same situation and the risk involved not only to being a CFI but to my profession as a whole.

 

[Ted]

One of the reasons I gave it up. Another prime consideration not to Instruct is if you make your living as a Professional Pilot not to expose yourself to the "FAA Liability". A certificate action on your CFI could easily result in also removing your ATP while being resolved, thus putting you out of work.

This happened to one of my coworkers who went almost a year off the payroll. Also my attorney advised me of the same situation and the risk involved not only to being a CFI but to my profession as a whole.

Which is unfortunately, since it deprives students of CFIs who can give them some of the best training and experience out there.

 

[RotorAndWing]

Which is unfortunately, since it deprives students of CFIs who can give them some of the best training and experience out there.

Agreed.

 

[tonycondon]

the faa does not need to worry about killing ga. they have the insurance companies for that.

 

[RotorAndWing]

the faa does not need to worry about killing ga. they have the insurance companies for that.

Unending litigation, no tort reform and way too may bottom dwelling lawyers.

On a semi related topic, when I had my Hughes 500 helicopter my insurance bill on it ran $28,000/year, my Hughes 300C's were running $16,000/year.

Makes regular airplane insurance seem downright cheap.

 

[JeffDG]

the faa does not need to worry about killing ga. they have the insurance companies for that.

I know, it's trendy to blame the insurance companies...but they're simply covering their own exposures to idiotic litigation and such. I'll bet that were there to be meaningful tort reform, you'd see insurance premiums, particularly liability insurance, plummet.

Additionally, manufacturers and other suppliers would be able to reduce their costs significantly...I'm curious how much of the cost of a 430W is Garmin's liability insurance for when some idiot who ignored the pleas to get training spins the wrong dial and drives into a hillside.

 

[Areeda]

The other thing that I do when instructing in a student's plane is asked to be named on their insurance policy. A letter of non-subrogation is almost as good.

This means not only will the insurance company not come after you for a claim but they will defend you in a suit.

Joe

 

[Greg Bockelman]

The other thing that I do when instructing in a student's plane is asked to be named on their insurance policy. A letter of non-subrogation is almost as good.

This means not only will the insurance company not come after you for a claim but they will defend you in a suit.

Joe

Don't be so sure about that, Joe. Being a named pilot only means that you do not meet the open pilot provisions of the policy. And the open pilot provisions only cover the owner of the plane, not the non owner pilot. Believe me, I have gotten an education on how insurance works recently.

And to be named insured requires a bunch of hoops that I haven't gotten a clear answer from my agent on.

 

[Trapper John]

the faa does not need to worry about killing ga. they have the insurance companies for that.

But stupid pilot tricks create the loss record that the actuarial bunch use to set rates and conditions...


Trapper John

 

[midlifeflyer]

Which is unfortunately, since it deprives students of CFIs who can give them some of the best training and experience out there.

I've never seen anything to suggest that acting as a CFI is a high risk activity. I think it's unfortunate also - unfortunate that some people who would probably be good instuctors overinflate their exposure to the point that it falls outside of their risk tolerance.

That ~$100 difference in premium between flying an teaching on a non-owned aircraft pilicy? I think that's a decent indicator of risk factor difference also.

 

[midlifeflyer]

The other thing that I do when instructing in a student's plane is asked to be named on their insurance policy. A letter of non-subrogation is almost as good.

This means not only will the insurance company not come after you for a claim but they will defend you in a suit.

Joe

Gerg is right about this one, Joe.

Named pilot on the policy generally means that you are authorized to fly the airplane whether or not you meet the open pilot warranty and, in the case of an accident, the airplane is covered.

Beyond that they vary. Some insurers give additional protections to the named pilot, but most just give protection to the policy holder. Most don't cover =you= for =any= instructor liability claims while instructing (in fact, they tend to be specifically excluded in most) .

The agreement not to subrogate probably better, but all it means is that the insurance company, after paying a claim, will not come after you.

No instructor should rely on a student's policy without getting a copy of everything an having someone who understands insurance contracts.

 

[Ted]

I've never seen anything to suggest that acting as a CFI is a high risk activity. I think it's unfortunate also - unfortunate that some people who would probably be good instuctors overinflate their exposure to the point that it falls outside of their risk tolerance.

That ~$100 difference in premium between flying an teaching on a non-owned aircraft pilicy? I think that's a decent indicator of risk factor difference also.

I think for a lot of people it's more the consequences if something does go wrong rather than the probability of something going wrong that deters a lot of folks. The same reason a lot of people don't like flying in single engine planes in various conditions, or in some cases at all. Probability may be low, but the potential consequences are what bother them.

 

[Fast n' Furious]

I've gone to the full "head down defilade" mode on instructing, letting people fly my airplane and flying other people's airplanes. I don't. I stand too much to lose, have nothing to gain and it's far easier to just say "no mas". I won't even bring a CFI on board my airplane anymore either as my IPCs and BFRs are covered by work related events. I remember when flying was fun and now it's just a constant string of exclusions, provisions, waivers of this, regulations of that and just....stupid stuff. Anyone wanna buy a nice Mooney? I'm just going to take up playing the drums.

 

[midlifeflyer]

I think for a lot of people it's more the consequences if something does go wrong rather than the probability of something going wrong that deters a lot of folks. The same reason a lot of people don't like flying in single engine planes in various conditions, or in some cases at all. Probability may be low, but the potential consequences are what bother them.

I think that's part of it also, but it doesn't explain why these people fly at all or take passengers up or aspire to comercial aviation.

 

[Everskyward]

I must be an idiot because I can't recall ever asking anyone about their insurance and I don't have any extra of my own. As Mark alluded to, I have much more exposure to both potential violations and lawsuits through my job than the rare occasion I might fly in someone else's small airplane so I choose not to worry about it.

 

[Ted]

I think that's part of it also, but it doesn't explain why these people fly at all or take passengers up or aspire to comercial aviation.

There's a difference, though. When you take people up and fly commercially you do expose yourself to risk, but it's risk that you have greater control over. As it's been explained to me (and if my understanding is wrong, please correct me), as a CFI you're not only held accountable for your screw-ups while flying, but if your student crashes even after passing his or her check ride, you're still held accountable. The DEs I've used have emphasized that if I crash they'll get a phone call. So from my understanding, you're putting yourself on the line that someone else won't screw up.

That's not deterring me from wanting to get my CFI rating, though.

 

[tonycondon]

ted search through these forums on CFI liability. It seems that the most liability we face is when the student is solo. MidlifeMark has posted several good articles on the subject. Generally after checkride the liability drops off significantly. The key is that we cannot be negligent in training. Documentation is equally as important as conducting the training. When the student is dead you need proof that the training was completed the way you say it was. The documentation is one part where pt. 141 ops really shine.

 

[Greg Bockelman]

Ok, this is what I have learned. Least to most desirable.

1. If you don't instruct, there is no liability.

2. If you choose to instruct, you can always go naked. No insurance. If there is no net worth to attach, this kind of makes sense. But it really isn't a good idea. You never know what the lawyers can do.

3. You can draw up a training contract that holds you as a CFI harmless in the event something should happen while you are instructing. HOWEVER, most, if not all, insurance policies have clauses that prevent an individual from negating THEIR rights to subrogate, so in the end, that probably isn't a viable alternative, but it is better than nothing.

4. You can get the insurance company to name you as INSURED on the policy. That would give you the same protections as the owner, as it is explained to me. Please do not confuse this with being a Named Pilot. That only protects the Insured if something would happen while you were flying the airplane. That does NOT prevent the insurance company from coming after you to recoup their losses. (That is called subrogation, BTW)

5. You can get the insurance company to issue a clause that they won't subrogate against you if something should happen while you are providing insurance. This, along with number 4, is your best protection if you choose not to do Number 6.

6. This one is admittedly the best, if you instruct enough to justify it. You can purchase insurance that will protect you as a CFI from liability and property damage. In my admittedly limited research, I have not found any at a price point that made sense for me for as little instructing as I do. But apparently Mark has. Maybe Ron too.


According to my agent, it is very rare that an insurance company will subrogate against an individual. It just costs too much for them to pursue it. The return isn't worth the outlay. They will, however, go after that person's insurance company if there is any coverage for whatever happened.

When all is said and done, be very aware of what kind of risks you are taking when providing instruction on a independent basis. The risks may be greater than you realize.

 

[midlifeflyer]

The DEs I've used have emphasized that if I crash they'll get a phone call.

They will. So will your instructors. Just as JFK Jr's instructors were all interviewed by the NTSB =as witnesses= to an accident who could shed some light on his training.

I've been running an online challenge for, must be more than 10 years now: Tell me about a real situation when a CFI was successfully sued because of something that happened when the CFI was not in the airplane. No urban legends allowed. No, "Well, I heard about this guy who was the third cousin of a nephew of my ex sister in law who..."

I've managed to collect 2 solid references.

First is a case that I knew about already. If I recall it correctly (I can find the case again if anyone's interested.) In 1958, a flight school was successfully sued when a student pilot took off with (I think) the control lock on.

Second is not a case. In response to my "challenge" someone mentioned (and I was able to verify) an NTSB determination of "impropert instruction" as a probable cause of the accident in which there was a fatality. I count it because it's highly likely that the CFI was sued or that his insurance settled (unless he was totally uncollectible).

So that's about it. Two real examples over the last 36 years.

I'm still collecting.

Check out this article: It's an article forn 1996 that discusses CFI liability.

http://www.midlifeflight.us/downloads/files/TigerByTheTail.pdf

 

[Banjo33]

They will. So will your instructors. Just as JFK Jr's instructors were all interviewed by the NTSB =as witnesses= to an accident who could shed some light on his training.

I've been running an online challenge for, must be more than 10 years now: Tell me about a real situation when a CFI was successfully sued because of something that happened when the CFI was not in the airplane. No urban legends allowed. No, "Well, I heard about this guy who was the third cousin of a nephew of my ex sister in law who..."

I've managed to collect 2 solid references.

First is a case that I knew about already. If I recall it correctly (I can find the case again if anyone's interested.) In 1958, a flight school was successfully sued when a student pilot took off with (I think) the control lock on.

Second is not a case. In response to my "challenge" someone mentioned (and I was able to verify) an NTSB determination of "impropert instruction" as a probable cause of the accident in which there was a fatality. I count it because it's highly likely that the CFI was sued or that his insurance settled (unless he was totally uncollectible).

So that's about it. Two real examples over the last 36 years.

I'm still collecting.

Check out this article: It's an article forn 1996 that discusses CFI liability.

http://www.midlifeflight.us/downloads/files/TigerByTheTail.pdf

Beware, MAJOR necro-thread! Last post 9 years ago.

Midlife, any new examples of a CFI being sued?

 

[James331]

They add me on with a indemnity add on

 

[midlifeflyer]

Beware, MAJOR necro-thread! Last post 9 years ago.

Midlife, any new examples of a CFI being sued?

Since 2009?

There was at least one well-publiced case against Cirrus about 2012 in which the Minnesota Supreme Court said there's no such thing as instructor malpractice. Its a view that's shared in some states, not in others.

But I really haven't been keeping up that much.

 

[Banjo33]

Since 2009?

There was at least one well-publiced case against Cirrus about 2012 in which the Minnesota Supreme Court said there's no such thing as instructor malpractice. Its a view that's shared in some states, not in others.

But I really haven't been keeping up that much.

Yep, that’s what I was asking. Just curious if 45 years’ worth of data has indicated CFIs should really be concerned about personal liability. After posting that, I found a podcast by Max Trescott discussing this topic with a lawyer-friend. While his friend carries a significant amount of insurance (sounded like he has significant assets at risk), he mentioned a couple cases of where the CFI was being sued, but it was aimed to get at the CFIs insurance.

 

[Flyingfanatic]

I don’t carry it, only instruct part time and have not much blood in my turnip. I’ve often wondered how many cases are out there of a CFI being sued.

My bigger concern is me dinging an airplane when I’m instructing. I’m very cautious and professional, but we all have bad days sometimes.

I’ve looked at coverage through SAFE and it seems expensive for what you get. I’m trying to decide if it’s worth it.

 

[Matt Brasher]

We have our independent CFI insured under our policy. The cost difference with or without him is minimal.

Also, am I the only person that doesn’t get sticker shock for airplane insurance? Yearly premiums for a 200hr pilot in a $150k Bonanza are less than yearly premiums for a Honda Civic in Atlanta.