Insurance limits question

[bugsiegel]

We are a club and incorporated with limits of 100,000/1M on our two planes. I was told by the insurance company that is the highest they allow.
We have two 172's and 30 members. 100K per person seems like not enough and frankly 1M can disappear quickly too depending on the accident. I can see someone's medical bills in a severe accident going way past that limit. Imagine if the plane is full of passengers to compound this.
Lets say we did all our homework and the pilot was fully licensed, his credentials were checked out, he was checked to be proficient in our planes and then he has an accident. How much liability does the board of the club have in this type of situation?
All the members are share holders.
I called the insurance company and in short what the nice woman on the phone said is we settle our cases fast and don't let them drag on. But what about the real victim who actually needs long term care? 100K won't be much help there. Who foots the bill if little cessna's claim exceeds 1M?

 

[FlyBoyAndy]

I'm not an insurance guy but if you're worried about exceeding your insurance coverage and the potential club out of pocket money, can you buy an umbrella policy for the club if it does exceed coverage?

 

[bugsiegel]

I asked, not available.

 

[Ravioli]

How much liability does the board of the club have in this type of situation?
All the members are share holders.

This is more for your lawyer than the insurance company. What is the legal structure of your club? If it is a Corp or a multi member LLC the liability of the board is no more than any other share holder or member.

 

[flyingron]

Well, that won't prevent them from being sued. We had the board members sued in our HOA. The E&O policy we keep handles it, but you might not be able to get such for a flying club.

 

[bradg33]

First, the Board ought to have an E&O policy that will cover their liability for claims like improper oversight of maintenance, etc. (things that are "board" decisions). When I was on the Board of my former Club, I insisted the Board get an E&O policy. It was cheap (like $1500/year).

Second, the corporate veil probably protects your members from liability if the LLC/Corp. is run correctly, but there's some variance between states regarding how hard it is to pierce the veil. Ensure your insurance policy is worded in such a manner that your Club members themselves are "insureds" that would be entitled to not only the policy's limits, but it's duty to defend. If it doesn't, a member with no real liability could go broke fighting a meritless claim. Of course, unless some of your club members are high net worth individuals with collectible assets, the plaintiff's lawyers aren't likely to pursue them very hard. Most likely, they take the insurance policy limits and move on.

You might talk to another insurance broker, but my understanding is it's next to impossible for a Club to do better than $100k/$1mm for insurance limits. Even if it's available, you probably won't like the premiums.

 

[BillTIZ]

Local county airport management wanted $2M policies. There are a lot of corporate jets around.
Have not found any insurance company that will write a $2M policy on small GA aircraft. Let alone a glider.
Told management, “NoCanDo”, they pitched a small fit but ultimately had to relent.