Insurance Terms

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.