FBO’s are the life blood of general aviation. They provide the necessary services that facilitate ownership and operations of general aviation aircraft. While differing in scope of service and activity, they have in common, a location on the airport ramp where customers can stage arrivals and departures and receive varied levels of service and information. Exposures for an FBO can range for the most basic premises liability to flight training, Charter, Products and Hangarkeepers and more. Given the many different services provided, Risk Identification and management is extremely important to the daily operation of a successful FBO.
Airport Premises Liability
The airport Premises Liability Policy is the foundation policy for any airport operations. It provides Liability protection for Bodily Injury and Property Damage occurring on the insured premises designated in the Policy. The designated premises can be a specific address or location such as a Hangar, or it can be quite broad, providing protection in many different locations. Given the many varied types of operations that occur on airports, the basic Airport Premises Liability Policy is fairly limited in scope and must be endorsed to recognize more advanced commercial exposures such as Products Liability and Hangar keepers liability.
The Liability of an airport operator is significantly different than that of the fixed base operator or hangar tenant. While the regulatory environment has increased significantly of all player in the Aviation Arena, it has increased several fold for the owners / operators of today’s airports. Pollution and environmental issues, are changing with increasing frequency as are the demands of Federal, State, and Municipal regulators. Like large corporations, there is little appetite for financial risk, so coverage must be broad and risk analysis current and comprehensive.
Liability protection for damage to the property of others while in your Care, Custody or Control is excluded under General Liability policies. An endorsement for Hangarkeepers liability protection can provide coverage under the GL policy for that exposure as it relates to Aircraft, Aircraft parts and Accessories. Normally the coverage is written with two limits of coverage. One limit for the maximum payment for damage to any one aircraft, and a separate limit for the maximum payment for any single occurrence. It is important to note that Hangar keepers Liability is an aviation specific endorsement and does not extend to other types of property which may be in your Care, Custody, or Control.
Manufacturing and Products Liability
With Commerce comes liability. Aviation Products Liability coverage provides protection for liability arising out of the maintenance, repair, and servicing of aircraft. This coverage is normally provided as an endorsement to a Airport Premises, or an Aviation General Liability policy. The coverage can be specific to an individual exposure such as the sale of aircraft or it can be very broad covering a host of exposures such as those occurring at a typical Fixed Base Operator. Manufacturing while still a Products liability Exposure is viewed quite differently by insurance underwriters. Premiums will vary significantly depending on the critical nature of the item being manufactured as well as the Underwriters knowledge of the Product and the Manufacturer.