If you own a plane, you may use it as a means to make money through passenger air service. Whether you run an as-needed or scheduled airline, insurance is necessary before you take to the skies. Commercial airlines work with a variety of different insurance providers, as the risks are too high for a single carrier to manage them. Private airplane insurance, on the other hand, can typically be handled by a single company. Most of the coverage offered is required by law if you want to be a licensed air carrier, while some coverage types may be optional. Regardless of the type of passenger air service you are offering, you should speak with an insurance agent who is familiar with aviation coverage and who can help you build your private airplane insurance portfolio.
2014 Charter Flight Industry Facts From IBISWorld
- There are about 22,740 charter flight businesses operating in the U.S.
- These companies employ more than 60,000 people.
- The charter flight industry is responsible for approximately $18 billion in revenue each year.
What You Need to Know About Aviation Insurance for Passenger Air Services
If you own or rent an aircraft for the purpose of providing passenger air services, you will have a number of insurance requirements before you can legally take flight. Most importantly, you need to insure against damage to your plane, damage done to third-party property by your plane, and injuries to third parties caused directly or indirectly by your plane.
There are a few insurance companies that carry policy packages specifically designed for those in the aviation business. This is very specialized insurance, so it is best to work with an insurance agent who is well versed in aviation terminology and who can help you find the right coverage package to meet your specific needs.
Passenger Air Carriers Have Specific Insurance Coverage Needs
Aviation insurance packages for businesses that provide passenger air services include a number of coverage options, many of which are required by law. Coverage includes property coverage for your plane and equipment, as well as aircraft liability insurance, which is required. You will want to be sure to ask your insurance agent about these coverages:
- Hangar and ground support equipment coverage: This is a form of property insurance designed to cover damage to your aircraft hangar as well as the equipment stored inside, such as tools and mobile equipment.
- Ground risk hull not in motion insurance: This private aircraft insurance provides coverage for your airplane when it is on the ground and not moving. This includes coverage against such things as fire, hail, vandalism and hangar collapse.
- Ground risk hull in motion insurance: This insurance coverage covers you against damage to your aircraft while it is in motion but still on the ground, such as while it is taxiing to the runway or as it is slowing down after touching down on the landing strip.
- In-flight insurance: This covers damage to your aircraft from the time it lifts off the ground at take-off until the moment the wheels touch down at landing.
- Passenger liability insurance: This aircraft liability insurance provides coverage for financial damages in the event that your passengers suffer property damage, injuries or death while employing your flight services. This coverage is typically sold based on the number of passengers on your flight or the number of seats you have on your plane.
- Public liability insurance: This aviation liability insurance provides coverage against damage your plane or pilot may cause to the general public, such as if your plane hits a house or collides with another aircraft while taxiing.
- Umbrella insurance: Because the liability costs associated with a plane crash can be astronomical, your policy’s coverage limits may not be high enough to manage your financial damages. Umbrella insurance provides extra liability insurance that will pick up where your policy leaves off.
How Much Does Private Airplane Insurance Cost?
Insurance rates for business aircraft insurance can vary significantly from one business to the next. Some of the factors that may significantly affect rates include the following:
- Pilot experience: Having pilots with several years of experience flying your plane will result in significantly lower insurance rates than what you would pay for a novice pilot.
- The type of plane you are insuring: There are a number of different types of aircraft, from turboprop planes to full-sized jets. Your insurance company will take the type of plane you are using for your business into consideration when determining your coverage rates.
- The passenger capacity of your airplane: While your plane might not always be full, the number passengers you can potentially carry at one time may influence your coverage rates.
- The amount of your deductible: As with any insurance policy, a higher deductible will result in a lower premium. Be certain that you do not opt for a deductible that is so high as to cause you financial troubles if you must pay it.
- The insurance company you choose: Different insurance companies will offer their coverage at different rates. If a policy package is very low priced, it may be because the coverage provided is substandard. An independent agent can help you compare policies so that you know that the one you choose is priced right and offers sufficient protection.
Get Help Finding the Right Business Aircraft Insurance
Insuring your passenger air carrier business can be a complex endeavor, especially if you want to be sure that you have sufficient aviation liability insurance. A Trusted Choice® agent who is familiar with aviation coverage can help to simplify the process. These agents can explain your various coverage options, help you understand your risks and exposures, and can even shop around for competitively priced policies that are suitable for your business. Find a Trusted Choice agent near you to learn more about passenger air insurance portfolios.