Stuart Hope is a co-owner of Hope Aviation Insurance. His career as an aviation insurance broker... Read More
Your corporation has paid premiums for years hoping it would never need to use the product it had been purchasing since acquiring the firm’s first aircraft, but unfortunately Mr. Murphy surfaced. Your risk manager received a call that the company aircraft was involved in a loss situation. This article will give you some insight regarding the right moves to make, and what to expect from an insurance perspective.
No one ever thinks it will be their flight department that has an accident, but even the most seasoned pilots make mistakes and the best maintained aircraft sometimes fail. When the stars align against your company, the result can be as simple as a call from the pilot informing the insurance broker of an inadvertent gear collapse or runway excursion on landing, to a news reporter calling the company receptionist asking if management will comment on its aircraft being involved in a catastrophic accident with multiple fatalities. Obviously, the handling of these two events from an insurance perspective will vary. This month we tackle the gear collapse scenario.
Your company aircraft is returning from a long day of business travel with two executives, two prospective investors, and its crew of two pilots. On roll-out, the right main gear collapses; the aircraft veers hard right and off the runway, careens into a drainage ditch and comes to a stop.
Everyone immediately exits the aircraft and runs for safety. Two passengers received non-critical injuries. The aircraft is damaged extensively and the runway subsequently closed until debris could be moved. Your company pilot calls to report the accident to his direct report. What’s next?
Rules to Follow
• Rule number one after any accident is always the same: Take care of the people involved! Worry about the airplane once you have attended to anyone injured or affected by the accident.
• Once you have all injuries under control, one of your first calls should be to your company’s insurance broker to report the claim.
• The broker in turn will contact the insurance underwriter, which will assign an adjuster to handle your claim. He or she can provide valuable guidance. Use those resources.
• Also, your broker will act as your claim advocate throughout the process, to monitor and make sure the underwriter is meeting its coverage obligations.
Deal next with the damaged aircraft. Here is where the insurance adjuster can be a great resource. A seasoned adjuster will have handled hundreds of similar claims and can quickly advise you regarding the proper sequence of aircraft removal, such as who to hire to accomplish that task and where to take the aircraft to begin appraisal for repair.
Pressure will mount to move the aircraft as quickly as possible, so the runway can be re-opened, but hiring a local tow-truck operator to throw some straps around the aircraft and pull it out of the runway area is not a good idea. In the rush to reposition a vehicle after an accident, many aircraft that were not badly damaged wind up with major structural issues due to someone attempting something for which they were unqualified.
In addition to repair of the aircraft, other coverages also are available to your company.
• Trip Interruption coverage reimburses a specified amount per person, for the cost to transport your passengers to their destination airport or origin airport.
• Extra Expense coverage will pay for supplemental lift [to charter or lease an aircraft] while the company aircraft is being repaired. This coverage pays the “extra expense” over and above the per hour operating expense that your company would have incurred with its own aircraft for the same trip. Extra Expense for Temporary Rental Parts, Guest Voluntary Settlement, Medical Expense and other ancillary coverage may also be triggered in the event of an accident.
So there are no unrealistic expectations, coordinate closely with your company’s adjuster and insurance broker. They can explain what coverages are available and the scope of each coverage. In its simplest form, insurance is designed to put your company back where it was before a loss—no better, but no worse.
Generally, once the claim has been reported to the insurance company, your firm’s insurance broker is not technically a part of the claims process and may or may not be copied on correspondence between your firm and the insurance adjuster. I suggest keeping your broker in the loop, however. Although the broker has no power to make something covered that’s not mentioned in the policy, I have found over the years that the difference between a good and bad experience boils down to one word: ‘Communication’.
Your company’s broker speaks the “language” and is its claims advocate when needed.