Contractor shall obtain at Contractor’s expense, and keep in effect
during the term of this Contract, Aircraft Liability Insurance with a combined
single limit for bodily injury and property damage including passengers (if
carrying passengers other than crew members) of not less than $________ per
When do they apply?
- Use when the contract involves the operation of an aircraft (including
helicopters). If the contract involves the aerial application of any chemical,
fertilizer, seed, or bait, add Aircraft Aerial Application Liability coverage.
Aircraft Liability covers liability for bodily injury and property
damage to others (i.e., injury to, or death of persons outside the aircraft as
well as property damage or destruction done with the aircraft), arising out of
the ownership, maintenance, or operation of an aircraft.
- Aircraft Liability generally does not cover the crew. Passenger bodily
injury liability is usually only required when carrying passengers other than
crew members. If carrying state passengers on behalf of the state, make sure
that (1) the pilot is certified to carry passengers and (2) the Aircraft
Liability provides coverage for the passengers. Check the qualifications and
certifications of the pilot.
- Aviation excess liability coverage is available. It can be purchased to
"follow form" (provide the same coverage) of a primary insurance
- Aircraft Liability has a medical coverage option. If chosen, this pays
regardless of fault. There is no deductible. It is intended to pay medical,
surgical, hospital and funeral expenses up to the applicable limit for
occupants of the airplane. Crewmembers may be included in this coverage.
- Unlike many other forms of insurance, most aviation insurance is
negotiated. The price for the contractor´s premium isn´t read off a chart. It
is a rate arranged through a broker and underwriter. Insurance coverage is
underwritten based on many guidelines, including but not limited to, claims
experience, financial stability, length of time in business, length of time
with current insurer, size and type of aircraft, etc.
- In some cases, an excess limit of aviation liability combined with the
proper primary limit can provide higher limits of protection for the
contractor. This coverage relies on the underwriting already performed by the
primary insurance carrier.
- Helicopter insurance is more expensive than fixed-wing aircraft
insurance. Helicopters represent only about 8% of the worldwide general
aviation fleet, making it difficult for underwriters to "spread the
risk." Also, helicopters statistically present a higher number of
accidents and fatalities per flight hour than the general aviation fleet as a
whole. As a result, a higher premium is required to cover the expected losses
from this market segment. Helicopters operate in a unique environment (low
altitude VFR with birds, wires and poles), are often used for hazardous
missions (law enforcement, news gathering, sling loading) and, arguable, have a
greater propensity for human error due to maintenance and flight proficiency
- Limit definitions:
- If the limit of Aircraft Liability has no sub-limits, it is considered a
"smooth" limit. A smooth limit is a limit of liability that
offers a combined single limit of coverage that applies to all bodily injury
and property damage claims. A specified maximum amount can be paid out for a
covered occurrence in any combination - passenger bodily injury, or other person´s
bodily injury and/or property damage.
- When the limit has a sub-limit, the coverage is usually a combined
single limit of coverage that applies to all bodily injury and property damage
claims. However, a reduced or limited amount of coverage, i.e., a sub-limit,
from the combined single limit of coverage is available to pay for claims
resulting from passenger bodily injury.
- AAsk questions such as, but not limited to: Is the area populated or
rural? Are there any adverse conditions that may apply? Will all flights be
conducted during daylight hours under FAA visual flight rule conditions? Or,
will the activity be done at night and require instrumental flying
certification? Do all of the airport lighting systems, at a minimum, have
runway boundary and threshold lights? Will water dropping activities (bucket
work), external (sling) transportation, or similar work be involved? Will the
operations involve only crewmembers or other employees of the Contractor
onboard the aircraft? Or, will this activity include the carrying of passengers
other than those of the Contractor? Will there be state employees, other
subject workers of the state, state volunteers or any other third party on the
aircraft? Will all of these passengers be carried on behalf of the state? If
not, at whose risk will they ride? Will the transportation of passengers be
allowed at night in single engine aircraft? Is the pilot certified to carry
Aircraft aerial application liability
Contractor shall obtain, at Contractor’s expense, and keep in effect
during the term of this Contract, Aircraft Aerial Application Liability
Insurance covering claims arising from spraying operations. Coverage shall not be less than $__________________ combined single
limit (alternate language if combined single limit cannot be provided: $
____________ per person and $______________ per occurrence for bodily injury
and $___________ for property damage).
This insurance requirement can also be met with an endorsement to the
Aircraft Liability coverage.
When do they apply?
- Use in addition to Aircraft Liability whenever a contract involves the
aerial application of seeds, fertilizers, or chemicals, as for agricultural
purposes. Chemical coverage for aerial application may be added as an
endorsement to Aircraft liability coverage.
- Aircraft Aerial Application Liability covers liability for bodily injury
and property damage to others, caused directly by aerial application by an
aircraft of seeds, fertilizers or chemicals.
- The chemical application operation has specific hazards. Over spray,
spraying the wrong field or area, improper application of the chemicals, use of
the wrong chemicals and improper mixture of the chemicals are a few of the many
concerns. Consider adding risk control measures (doc) to minimize these
exposures, i.e., what controls are in place to make sure that the field or
property being sprayed is contained and human access is restricted during
- Aerial operators do not normally carry passengers. Therefore, aircraft
liability passenger bodily injury coverage is not required. However, insure
that the Contractor will not carry, and the contract does not require the
carrying of passengers.
- Aircraft Aerial Application Liability or chemical liability coverage is
tailored to the aerial operator´s business activities. Insure that the aerial
operator has the appropriate chemical category of coverage for your activity.
- Chemical categories include:
- XC - Seeds and Fertilizers Only.
- RC - Restricted Chemical.
- CC - Comprehensive Chemical.
Extensions of liability coverage for CC include:
- Adjacent Fields.
- Crops Being Treated. (The wrong chemical on the right field, or the right chemical on the wrong field.)
- Picloram (Tordon).
- It is a good business practice to require pollution liability coverage
for aerial application activities. Aviation coverage excludes many pollution
exposures such as actual or threatened discharge, seepage, migration, release
or escape of pollutants.
- Assess the risks of the particular contract and use the Risk Assessment tool to determine appropriate insurance limits and risk control measures.