Avionics News March 2015 - 61

supplier was providing nonairworthy parts.
circumstance. As with all things, there is risk for human error. While
So why should the shop owner's insurance step up to the plate for
we could give you a multitude of what-if scenarios on you or your
this? First and foremost, the shop was named in the lawsuit, so the
shop being negligent, here is an actual insurance claim that an avipolicy will pay for the cost of legal defense. Additionally, the shop
onics shop was involved in due to one of its vendors being at fault.
that was outsourced parts chose not to carry product and completed
The avionics shop was redoing a panel on an A36 Bonanza. The
operations insurance or grounding liability.
majority of the work was performed in the
Essentially, the shop was left holding the bag
shop; however, one of the equipment pieces
for this claim. Its carrier cannot effectively
was outsourced to another shop that specialHOW DOES A BUSINESS STAY
subrogate against the negligent supplier, and
ized in overhauling this particular instruinstru
COMPETITIVE AND OVERCOME THE
the only solace is that the FAA revokes the
ment. This wasn't the first time it had used
EXPENSE OF INSURANCE EACH
Part 145 repair station certificate.
this vendor. The shop had always been very
YEAR? THE ANSWER IS TO ENSURE
Remember, this was an actual claim,
happy with the service received, the reasonwith identifying details altered to protect the
able prices and the quick service.
YOU ARE NOT OVERPAYING FOR THE
people and entities involved.
After the A36 panel was completed, the
REQUIRED COVERAGE.
If the three reasons above weren't justijusti
aircraft owner was giddy with excitement.
fication enough to carry the right insurance,
He now felt very comfortable flying in hard
consider these:
instrument meteorological conditions. The
owner used the plane to take his clients from their offices to his
1. You know pilots talk among themselves. Reputational risk
manufacturing plant to show the quality of work they could perform
is at stake for your shop's ability to receive business in the
for them. He was tired of weather preventing him from doing some
future. If you have an experience similar to the one outlined
trips. The shop owner also was happy; he had another satisfied cusabove and don't have any coverage to "make things right,"
tomer who would be a great reference for future jobs.
do you think you will get more or less business? Without the
Fast forward a bit, and the shop owner woke up to an overcast
right insurance, your shop will have less business coming in,
morning and news that a small plane crash had killed a pilot and two
as well as the potential risk of losing assets owned by you
passengers. Initial reports indicate the pilot made an emergency call
and your business. You have worked hard for what you have;
to air traffic control, indicating some kind of avionics/instrument
insurance helps you keep it.
problem. A sad story, but the shop owner's day continued as normal.
2. If you or a family member were victims in the A36 sceIn the coming months, the Federal Aviation Administration and
nario, would you expect there to be compensation for your
the National Transportation Safety Board determine the probable
pain, suffering and negative financial ramifications of not
cause of the crash - some equipment was not serviced/overhauled
having your loved one there to produce and care for your
correctly. The people on board the aircraft were high-income generfamily? Do you feel a moral obligation to be in a financial
ators for their families. It doesn't take long for their estates to hire an
situation to offer more than your "tool box and truck" as
aviation-specialized attorney to file suit against the avionics shop.
compensation? Consider your employees. Do they deserve
This particular shop had been in business for 20 years and never
(and expect) coverage to be in place if they are named in a
had anything like this happen. There is top talent working in the
lawsuit while working on your behalf?
shop, and the staff is confident of their work. What could have
3. It is possible to generate more clients by being responpossibly gone wrong? Nothing, other than the instrument that was
sible to their expectations and to yours. If you are diligent
outsourced to another vendor was not performing the same superior
enough to carry the right coverage, request that your venservice. The FAA agreed with this assessment and determined the
dors do the same, and request evidence of that coverage
work performed by the other Part 145 repair station was to blame.
every year. Do this even if you are supplying products or
The outsourced vendor was notified to stop all operations immediservices on a wholesale basis (not serving the end user,
ately. Additionally, the FAA grounded all aircraft serviced by the
such as the aircraft owner). As a consumer, you prefer to
avionics shop.
use companies that are bonded and insured. Why wouldn't
Does this story hit home with you?
you want to offer the same to your clients?
Thankfully, the avionics shop in this real-life example had the
Find an aviation insurance professional you can trust to
right insurance - general liability insurance - to include not only
accurately represent you and ensure you have the coverage you
premises liability, but product and completed operations, as well as
need, when you need it, from an "A" rated carrier. Not only will
grounding liability.
you sleep better each night, but your employees and customers
In the example above, the shop wasn't liable, as it had no idea the
will, too. q
avionics news

*

march

2015

61



Avionics News March 2015

Table of Contents for the Digital Edition of Avionics News March 2015

Point of Communication
AEA Now
The View from Washington
International News and Regulatory Updates
'Cell'-ular Changes
Member Profile
NextGen Connection
Avionics Corrosion Control
Member Profile
AEA Convention Information
Business Basics
What's Working?
Aviation Insurance 101
Legal Ease
A Conversation With...
Best Advice
Aviation Aces
Honoring our Heroes
What's New
Before & After
Marketplace Classifieds
Avionics News March 2015 - Intro
Avionics News March 2015 - Cover1
Avionics News March 2015 - Cover2
Avionics News March 2015 - 1
Avionics News March 2015 - 2
Avionics News March 2015 - 3
Avionics News March 2015 - Point of Communication
Avionics News March 2015 - 5
Avionics News March 2015 - AEA Now
Avionics News March 2015 - 7
Avionics News March 2015 - 8
Avionics News March 2015 - 9
Avionics News March 2015 - 10
Avionics News March 2015 - 11
Avionics News March 2015 - The View from Washington
Avionics News March 2015 - 13
Avionics News March 2015 - International News and Regulatory Updates
Avionics News March 2015 - 15
Avionics News March 2015 - 16
Avionics News March 2015 - 17
Avionics News March 2015 - 'Cell'-ular Changes
Avionics News March 2015 - 19
Avionics News March 2015 - 20
Avionics News March 2015 - 21
Avionics News March 2015 - Member Profile
Avionics News March 2015 - 23
Avionics News March 2015 - 24
Avionics News March 2015 - 25
Avionics News March 2015 - NextGen Connection
Avionics News March 2015 - 27
Avionics News March 2015 - 28
Avionics News March 2015 - 29
Avionics News March 2015 - 30
Avionics News March 2015 - 31
Avionics News March 2015 - Avionics Corrosion Control
Avionics News March 2015 - 33
Avionics News March 2015 - 34
Avionics News March 2015 - 35
Avionics News March 2015 - 36
Avionics News March 2015 - 37
Avionics News March 2015 - Member Profile
Avionics News March 2015 - 39
Avionics News March 2015 - 40
Avionics News March 2015 - 41
Avionics News March 2015 - 42
Avionics News March 2015 - AEA Convention Information
Avionics News March 2015 - 44
Avionics News March 2015 - 45
Avionics News March 2015 - 46
Avionics News March 2015 - 47
Avionics News March 2015 - 48
Avionics News March 2015 - 49
Avionics News March 2015 - 50
Avionics News March 2015 - 51
Avionics News March 2015 - Business Basics
Avionics News March 2015 - 53
Avionics News March 2015 - 54
Avionics News March 2015 - 55
Avionics News March 2015 - What's Working?
Avionics News March 2015 - 57
Avionics News March 2015 - 58
Avionics News March 2015 - 59
Avionics News March 2015 - Aviation Insurance 101
Avionics News March 2015 - 61
Avionics News March 2015 - Legal Ease
Avionics News March 2015 - 63
Avionics News March 2015 - 64
Avionics News March 2015 - 65
Avionics News March 2015 - A Conversation With...
Avionics News March 2015 - 67
Avionics News March 2015 - Best Advice
Avionics News March 2015 - 69
Avionics News March 2015 - 70
Avionics News March 2015 - 71
Avionics News March 2015 - Aviation Aces
Avionics News March 2015 - 73
Avionics News March 2015 - 74
Avionics News March 2015 - 75
Avionics News March 2015 - Honoring our Heroes
Avionics News March 2015 - 77
Avionics News March 2015 - 78
Avionics News March 2015 - 79
Avionics News March 2015 - What's New
Avionics News March 2015 - 81
Avionics News March 2015 - 82
Avionics News March 2015 - 83
Avionics News March 2015 - 84
Avionics News March 2015 - Before & After
Avionics News March 2015 - Marketplace Classifieds
Avionics News March 2015 - 87
Avionics News March 2015 - 88
Avionics News March 2015 - Cover3
Avionics News March 2015 - Cover4
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