I’m an approved pilot on my friend’s insurance policy, but I’m not a named pilot

I’m an approved pilot on my friend’s insurance policy, but I’m not a named pilot. What’s the difference? Am I exposed?

Key terms: approved vs. named. Every so often we get the question: “Can I be sued if there’s an accident?” Technically speaking, anyone can be sued for almost anything these days, but as it relates to your aircraft insurance, it’s important to know the difference between an “approved” pilot and a “named” pilot, because there are coverage implications for both.

First and foremost, pilots can most certainly be sued following a loss. It’s no different than being an at-fault driver in a car accident. If you’re liable for whatever damage or injury stems from the loss, then you should expect action. At the same time, regardless of fault or negligence, the insurance carrier has what is called a “duty to defend” with respect to the policyholder. They are obligated by the terms of the policy to defend the policyholder until the case is closed or until the limits of the policy have been exhausted. Any additional insureds or employees of the named insured will also have the defense of the carrier.

It is important to note that the policy limit is shared among all named parties and not a “per suit” or “per person” limit. In other words, the more parties named, the thinner the coverage limit is spread. Any pilots not added to the policy and not employees of the insured will have to find their own means of defense and coverage (usually through a renter or non-owned policy).

Herein lies the importance of being named versus being approved: if there is a loss with an approved pilot, all that means is that the coverage isn’t voided for the policyholder. It does not mean the approved pilot gets the benefits of the policy — those are reserved for named pilots. As you might imagine, there are a few extra steps to be named to a policy (complete a pilot form subject to underwriting approval, potential additional premium, potential training requirement, etc.), but if you’re a regular user of a particular aircraft, it could be the difference in being covered or not.