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Your Great Defense And Offense
Did you realize there are some non-insurance techniques that are an equally important component of your financial protection system? Stuart Hope reflects how for most sports teams- to be a champion you need a great offense and defense. In the context of insurance- these same disciplines must be practiced to guard the assets of the company.

Think of your insurance program as your defense. Think of your offense as the actions you can take to keep your defense off the field (hopefully for the entire game in our case). This is better known in the insurance world as risk management.


Modern corporate aircraft are incredibly reliable. In fact- a recent statistic suggests somewhere north of 85 percent of all aircraft accidents result from pilot error. In other words- the aircraft was functioning perfectly- the pilots just made a costly mistake. Unfortunately in the aviation world- errors can be catastrophic. Your most important offensive players therefore are your pilots. You spent significant money to purchase your aircraft and have committed additional capital to maintain it properly.

Curiously- aircraft owners will often spend hundreds of thousands of dollars on maintenance of the aircraft without a second thought and yet balk at the expense of pilot training.

Does this seem like a good idea?
Since we know the vast majority of losses are attributed to pilot error- it makes sense we would concentrate more resources to initial and recurrent training for our pilots. The insurance company is going to require (at a minimum) recurrent training in the aircraft being flown at least once annually. Many of the best flight departments send their pilots semi-annually.

Imagine you have the misfortune where your aircraft is involved in an accident- and you find yourself in a courtroom after a loss has occurred: Would the fact you sent your pilots - at added expense - for training twice yearly (when you were only required to send them once per year by the insurance carrier) play in your favor to a jury of your peers?

Further- it’s you and your staff who will be flown in the back of the company airplane. If it were me- I would want the best-trained pilots possible to transport my most prized assets.

THE ‘NO-COMPROMISE’ POLICY
Another critical component of a corporation’s “offensive” strategy is the no-compromise policy that all executives acknowledge; namely that your pilots will have the final say on the safety of any flight.

This is your pilot’s area of expertise- and accordingly there must be zero tolerance for an executive override- or pressure to launch a flight that has been ruled a “no go” due to safety concerns. Consider the following headline that appeared in the NY Times regarding the April 2010 crash of a Polish aircraft carrying Poland’s president Lech Kaczynski and dozens of high-ranking government officials: “Report on Polish Crash Finds Pilot Error- but Says Powerful Passengers Share Some Blame”.

The accident claimed the lives of all 95 persons on board (as outlined in Business Aviation and the Boardroom- March pp48-49). According to a report of the inquiry into the crash- the pilot had been in a very similar situation back in 2008- when he was a co-pilot. He watched his then Captain defy President Lech Kaczynski’s order to attempt a risky landing. The president was subsequently forced to drive all day and the Captain never flew the president’s plane again.

To bring this situation a little closer to home- companies that own business aircraft are often successful because of their tenacity- but this trait will not serve them well in the aviation arena when it comes to pushing the boundaries of safety.

Learn to recognize that often the best defense is having a good offense- and you will be well on the way to greatly improving your overall financial protection program. By now you should realize what you probably already knew; your pilot’s role in the safe operation of your aircraft is a tremendous responsibility. They’re professionals - let them do their job. Allocation of flight department resources should be considered accordingly.

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