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PUNC: Your Checklist for Insurance Coverage

‘PUNC’ (Pilots- Use- Named Insured and Contracts) is an acronym capturing the four most important areas of aviation insurance that result in the largest percentage of claims denials- asserts Stuart Hope. Get these four correct and 85% of your coverage will be solid.

Stuart Hope   |   1st May 2012
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Stuart Hope Stuart Hope

Stuart Hope is a co-owner of Hope Aviation Insurance. His career as an aviation insurance broker...
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In 2007- a corporate jet ran off the runway at the Santa Barbara Municipal Airport after aborting its take-off. The aircraft departed the end of the runway- impacted a berm and collapsed the nose landing gear- then slid on its nose an additional 100 feet before coming to a stop. None of the 15 occupants was killed- but the aircraft was heavily damaged.

The resulting insurance claim was denied by the insurer because a backup co-pilot being used that day did not meet the pilot requirements of the policy. Although very well qualified- he had “never attended any formal training course” relative to the aircraft type and had only flown a total of 25 hours in the previous four years. This history was causal to the loss.


Perhaps one of the easiest and most common ways to void all coverage under your aircraft insurance policy is to allow a pilot to fly your aircraft without confirming he/she meets the approved pilot clause of the aviation insurance policy. Contrary to popular belief- insurance companies do not like to deny claims but they also set mutually agreed-upon terms in the insurance contract - such as the Approved Pilots clause - that if not followed- leave little choice but to deny certain claims.

You need to know exactly who can and cannot fly your aircraft according to the requirements of the insurance policy. Aviation insurers require higher standards than required by the Federal Aviation Regulations - it is the insurance company that could shell out millions in the event of a loss- so it is in their vested interest to be completely comfortable with the pilots at the controls of your aircraft.

The insurance company will state in the policy exactly who is approved to act as pilot-in-command or second-in-command. Typically pilots will be listed by name. Some policies include an “open pilot clause-” which stipulates broad credentials and pilot experience that- if met- would allow an aircraft owner to use that particular pilot.

Depending on how coverage is structured- many policies have additional requirements listed for the pilots that must be met to the letter of the law! Some policies require “that all pilots- whether named or meeting an open pilot clause- must have successfully completed a motion-based simulator training course specifically designed for the make and model aircraft operated within the preceding twelve months of any and all flights covered by this policy- and annually thereafter.” Some of the items required by a claims adjuster after a loss are:

• Documentation that the pilot(s) flying the aircraft completed the above outlined training as required;
• Proof that the training took place in the make and model (e.g. Falcon 900 doesn’t equal a Falcon 2000) aircraft being operated;
• Evidence that pilots actually logged the amount of time previously reported to the insurance underwriter.

Insurance companies do recognize the need for flexibility when it comes to who is allowed to fly your airplane. If your regular pilot is ill or on vacation- it is helpful to utilize another pilot who has already been pre-approved by the insurance company. This is the intent of the “open pilot clause” found in some policies. The open pilot warranty is not designed- however- to allow you to let other pilots operate the aircraft on a regular basis.

Be very careful when relying on this provision of your policy. Compliance can be very tricky- and the insurance adjuster will closely scrutinize the circumstances and credentials of a pilot flying under the open pilot warranty in the event of a claim.

Some aircraft owners mistakenly believe it is acceptable for a non-approved pilot to receive instruction or log time in your aircraft- provided another “insurance- approved” pilot is in the cockpit acting as Pilot In Command (PIC) as defined by the FAA. However- PIC as defined by the insurance carrier is “sole manipulator of the controls-” not who is responsible for the aircraft.

If the pilot physically handling the controls at the time of a loss is not approved as pilot under the policy- there is no coverage. Insurance underwriters view the practice of a non-approved pilot handling the controls under instruction as an increased hazard requiring their analysis and approval prior to flight. Remember- a majority of accidents and incidents are attributed to pilot error.

The insurance company cares greatly about who pilots your aircraft. Claims get denied when an unapproved pilot is at the controls! Consider keeping a copy of the approved pilots section of your policy in the cockpit as a reminder. Make certain your Flight Department ensures the required recurrent training is completed within the allotted time and that any pilot used regularly is listed on the policy by name.

Prior to using a pilot other than your regular pilot(s)- ensure the Flight Department has that pilot complete a pilot form verifying his credentials- submitting it to your aviation insurance broker and receiving the blessing of the insurance carrier. Remember and use PUNC. Next month we will address the “U” in PUNC.


Read more about: Business Aviation Insurance

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