Debunking common aviation insurance myths with Mike Dalton – Part 3

Welcome to the third edition of our four-part series featuring Mike Dalton as he delves into the world of aviation insurance, debunking common myths and misconceptions. Join us as we navigate through the complexities of aviation insurance, separating fact from fiction, and ensuring you are well-informed with accurate and practical information. Stay tuned for each instalment as we unravel these myths one by one!

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
$20,000,000.
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.

Mike Dalton is our Head of Aviation at Agile Underwriting. He is a licensed pilot with a Commercial, ATP and RAAus Pilot qualifications in Australia and the US. Mike enjoys working with customers and discussing aviation and is eager to simplify aviation insurance for customers and brokers.
Mike has 30 years of insurance experience, specialising in aviation underwriting. He has extensive experience writing risks in Australia, New Zealand, Papua New Guinea, and the South Pacific and has written policies in the airline, manufacturing, airport, and general aviation industries. He has held management positions at one of Australia’s largest Aero Clubs and has his own Air Operators Certificate for passenger transport charter operations. He owns and operates a small vintage aircraft collection and has flown over 50 different general aviation aircraft types.