Debunking common aviation insurance myths with Mike Dalton – Part 3

Mike Dalton
Myth #3 – My association members liability policy is sufficient

Some aircraft association groups have negotiated on behalf of their members a level of
liability insurance which is included in their annual membership subscription. While these
arrangements benefit from large premium discounts because of group buying power, there
will usually be trade-off for that in terms of coverage.
The current members liability inclusion enjoyed by members of Recreational Aviation
Australia provides for a limit of liability of $20,000,000 in respect of legal liability to third
parties and passengers. This is a very generous limit that is included at a price point
unachievable by the individual but unfortunately most members stop reading after
There are a 3 sub limits applicable to this cover with the most noteworthy being the sub limit
of $250,000 in respect of claims made by passengers. This means that, regardless of the
overall policy limit of $20mln, the most the members liability policy pays in respect of a claim
made against a member, by a passenger, is $250,000.
Members should carefully consider if this is sufficient insurance to protect themselves, as
damages awarded for more than $250,000 will require the member to contribute towards the
settlement themselves as well as pay a pro rata proportion of the legal fees incurred.

Members who own aircraft, however, can easily purchase a top up insurance cover within
the scope of their aircraft insurance policy and which acts in excess of the members liability
policy thereby providing additional protection. Top up cover is extremely affordable as
compared to the additional protection it provides.