Quick Reminder: Understand Your Insurance Certificates
More often than not, operators dismiss certificates of insurance as an incidental necessity to do business or win contracts. All too often, certificates are fulfilled without proper attention given to the ramifications if something were to happen involving said contract.
It isn’t uncommon for commercial operators to have dozens of insurance certificates granting waivers of subrogation, additional insured status, etc. All of these things are standard procedure for RFPs (requests for proposals), which means obtaining the insurance certificate is usually viewed as just another bullet point on a laundry list of required items. However, it is important to understand how much the scales can be tipped when granting some of these coverages to third parties.
One of the most impactful endorsements is the waiver of subrogation. When your aircraft is in the hands of a third party, if you’re doing work for someone, or if you’re letting another pilot fly your aircraft, it’s often a request from that third party to be granted a waiver of subrogation. Although most carriers will grant this request, keep in mind that by doing so, you’re waiving or “surrendering” your right to go after (subrogate) that third party for reimbursement of any claim dollars.
Therefore, you’re essentially inheriting any losses that occur while your aircraft is in their possession — absolving them from what would otherwise be their liability. For this reason, vendors slip these requirements into contracts in order to shield themselves from paying any damages. It’s important to understand what you’re really exposing yourself to, even in the pursuit of business.