Avionics News April 2015 - 76

series

Aviation Insurance 101
B Y

K YLE

W HI T E

B R Y A N

A V E RI L L

A V I A TI ON

S OL U TI ON S

Do you understand the
various types of insurance
policies and what they cover?

wning an avionics shop is not an easy venture.
available coverages; in coming months, we will outline in further
You work hard to ensure the work is done right,
detail what these coverages do and do not cover. In order to get a
and you don't give up easily. Whether putting in
good idea of the insurance you are currently paying for, get a copy
long, frustrating hours tracing an intermittent sigof your insurance policy and follow along. If you are a repair shop,
nal that is grounding somewhere, or making sure
not a manufacturer, most likely you will want to have a general
all the tools are accounted for before buttoning up the panel, you are
liability policy for your business. Once you start employing people,
committed to getting the job done right.
depending upon the state you are located, you may be legally
Hopefully you are aware the Aircraft Electronics Association
required to carry workers' compensation insurance, as well. The last
offers a variety of classes educating avionics
policy you may consider is a property policy.
technicians and business owners and managEach of these policy types offer ancillary
EDITOR'S NOTE
ers about the obligations entailed with owning
coverages you may assume are included, but
or operating an avionics shop. However, are
are not. For example, a client who owned a
Contributed by Kyle White,
you aware of how to manage your risk? Are
maintenance shop was sued by one of their
Aviation Solutions president, and
you prepared for the threat of a lawsuit from
customers. However, the customer wasn't the
Bryan Averill, insurance broker
work you may or may not have been negligent
end user of the product. They assembled the
for Aviation Solutions. White is
a published author for aviation
for? Most consumers don't understand what
product, along with other parts, from other
magazines and frequent speaker
coverages they are purchasing when it concerns
suppliers, to make the end part to be used on
at aviation conventions. Averill is
insurance for their business. Others become so
a Boeing 737. The operator of the Boeing 737
a former avionics technician in the
frustrated, they don't buy any.
recognized a problem with the product and
U.S. Marine Corps, and specializes
Consider the last time your insurance policy
filed suit against the company the part was
in avionics insurance liabilities.
renewed. What was the process like for you?
purchased from. That company then sued our
Aviation Solutions provides an
expert analysis on the insurance
Do the words stressful, confusing and/or time
client who repaired that particular piece of the
needs for general aviation,
consuming come to mind? The headache of
product. Fortunately, our client was carrying
offering an array of coverages,
securing insurance for your business can be
product and completed operations coverage;
including product and completed
alleviated. First, it is important to understand
however, the other shop was not. As I sat
operations. For more information,
what coverages you do and do not want to have.
next to our client, in a room full of lawyers,
visit aviationsolutions.aero.
With that in mind, then you evaluate price. All
I asked the other shop what their insurance
too often, consumers purchasing insurance only
company's position was on the claim. They
consider price, because money is a language we all understand. If
whispered to their attorney, who then said, "We don't have the covyou are purchasing an airplane, is price going to be your only considerage we thought. Our policy doesn't cover this type of loss." I was
eration? Of course not! You would consider the proposed use of the
flabbergasted; how could such a large company overlook such an
plane to help you determine the best kind of aircraft to consider, then
important coverage?
factor the price into the equation. Insurance is the same situation.
To fully understand the types of policies, you must consider what
The purpose of this article is to give you a brief overview of
they cover:
76

avionics news

april

2015

http://www.aviationsolutions.aero

Avionics News April 2015

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