COMMONLY USED AVIATION INSURANCE TERMS EXPLAINED
Aircraft Liability Insurance – Protects the insured against claims for bodily injury and property damage caused by or arising out of the ownership, maintenance, or use of the aircraft.
Aircraft Hull Insurance – Reimburses the insured for physical damage to the aircraft due to an accident or incident. Typically does not cover loss of use, diminished value, or wear and tear.
Medical Payments – Voluntary payments to passengers for direct medical expenses as a result of an accident or incident. Paid without regard to legal liability.
Purpose of Use – Defined in each policy, this spells out the approved uses of the aircraft under the policy. Some common uses are:
Pleasure and Business – Non-commercial use of the aircraft for personal or business travel where no charge is made for such use.
Industrial Aid – Non-commercial use of the aircraft for business travel where no charge is made for such use, but the aircraft is flown exclusively by professional pilots employed for that purpose.
Commercial – Commercial uses include such operations as instruction, rental, charter, aerial photography, banner towing, and many more.
OPW OR OPC – The open pilot warranty or open pilot clause sets forth the minimum requirements for a pilot to fly the aircraft under a policy without specific approval of the insurance company.
Named Insured – The policy owner. The person or entity whose name appears on the first page of the policy and who has the authority to change or cancel the policy.
Additional Insured – A person or entity with an interest to be protected but who is not a named insured.
Combined Single Limit – A combined limit of liability applying to bodily injury and property damage. Usually stated as a limit per occurrence.
Sub-limit – A single limit of liability for bodily injury and property damage per occurrence which is further limited to a smaller maximum amount payable to one person.
Smooth Limit – A single limit as above with no internal per person limits. The entire limit is available to satisfy a claim by one individual.