What makes you assume that?
That won't protect the instructor from a suit by an injured third party, including the trainee.
Unless the instructor is an additional insured under a flight school policy (which s/he may not be if s/he is an independent contractor rather than an employee), that's not likely, and for instruction outside such a school policy, the instructor is probably not covered at all. While it may be possible for the instructor to be added as an insured (not a "named pilot") on the trainee's aircraft policy, many owners are reluctant to do that because it dilutes the owner's coverage. But even if you become a named insured on the owner's policy, that will not cover you for instructional liability if, say, the owner later has an accident and claims it was due to negligent training on your part. If nothing else, the "duty to defend" in such policies saves you the tens of thousands in legal defense costs you'd be socked with even if the plaintiff's case eventually is tossed or fails before a jury.
Then you want one of the CFI policies which include aircraft hull damage, third party liability, and instructional liability. AVEMCO offers such directly, and Falcon offers such through NAFI. Since I give several hundred hours of training to people in their own planes each year, I view my NAFI/Falcon policy as essential for my own protection, and it is also a deductible cost of doing business.
How much do you want? The policy I buy is $1M liability and $75K hull. Costs me $1300/year, but I couldn't afford the risk of working without it.
AVEMCO does not offer "instructional liability", more commonly referred to as "professional liability" coverage.
A lot of instructors had said they had the AVEMCO CFI policy, so I assumed it included instructional/professional liability. However, from AVEMCO's site:
So, I would recommend that any CFI's out there think twice before buying that policy as it is not as complete as I think a CFI policy should be, and I think that's a deal-breaker. OTOH, the NAFI/Falcon policy has that feature.
Seems that contrary to the discussion above, AVEMCO has added instructional liability.
