The Two Biggest Risks to your Insurance Policy: Pilots and Training.
We just shared this a couple of months ago, but over the last several years, this topic has been as close to a recurring theme in Squawk Box as any and we believe it’s worth repeating because of its dire importance when it comes to avoiding coverage issues following an accident. Now, more than ever, given the hard market, it’s incredibly important to know what’s expected and required of every pilot. Requirements, expectations, flexibility, and more have all been pulled way back to flatten the curve (to use a current buzz term) of aviation accidents.
I can’t tell you how many times we’ve caught subtle references to additional exposures we weren’t initially made aware of that would’ve otherwise jeopardized coverage.
Among the most common sources of revealing these exposures is social media. A company’s Facebook page or the LinkedIn page will be the first to tell when a new service is available or a new pilot is hired. Often it’s the insurance carrier that’s one of, if not the last to know, which creates a gaping hole in the coverage if not immediately remedied. Just the other day I caught the byline “Now offering charter flights!” for a tour company on the east coast. Up to that point, the company was only covered for tours, making any coverage for charter flights null and void.
A subset of this, which is far more common, is when new pilots are hired. Pilots come and go far more often than operators add/drop services, which means it’s much easier for new hires to get lost in the fray of day to day business, HR, and FAA dealings. In some cases, by the time the pilot is passed along to us for review, they’ve already been flying. This instantly creates a massive exposure because if that pilot isn’t approved for one reason or another, every flight (and by extension, every passenger) is without insurance.
Secondarily but not mutually exclusive is that same pilot’s training. Just because he came from another operator and was flying the same type of aircraft does not mean he’s already approved on your policy. Training requirements vary greatly from one policy to the next. Special training exceptions are made daily which can even be as specific as having named pilots train differently than those flying under the OPW! Regardless of how liberal or unique your training/hiring requirements may be, every pilot must be approved by the insurance carrier. This involves a review of their merit as well as their training. A shortcoming in either category may void coverage and if said pilot has a loss, it may put an operator out of business. We’ve seen it happen so this isn’t just a hypothetical. With the rash of aviation accidents in the past year, underwriters are only going to get more rigid and less accommodating so never assume pilot acceptance until you have it in writing from your agent!
