Most people think of their homes or cars when the topic of insurance comes up. But homeowners and auto insurance are just the tip of the iceberg. Wherever liability exists, an insurance policy to cover that liability can be found. It’s just a matter of choosing a carrier and selecting a policy.
If you need an example of a little-known insurance product most people have never heard of, look no further than hangar keepers liability insurance. It is exactly as its name implies. It protects organizations that own and operate airplane hangars from financial loss in the event that the aircraft in their care is in any way damaged.
It’s safe to assume that hangar keepers liability insurance is expensive. An aviation company isn’t likely to get it as cheaply as its auto insurance. After all, airplanes are expensive. They cost a lot to repair and replace. Therefore, liability insurance premiums are priced accordingly.
Here Are the Basics
Liability insurance for hangar owners and operators is not difficult to understand, at least in principle. Most of us would probably be confused with the day-to-day implementation of such insurance. At any rate, the insurance is crucial to anyone involved in airplane hangar operations. This includes owners, aircraft repair shops, FBOs, and other similar businesses.
Here are the key aspects of hangar keepers’ liability coverage:
- Scope – The insurance protects against damage to all aircraft, regardless of type, while set aircraft is housed within a hangar or elsewhere on the covered party’s premises.
- Liability – The insurance pays for losses resulting from operator negligence. This includes things like accidents that occur during aircraft movement.
- Policy Additions – Some policies include riders offering additional coverage for things like equipment and tools stored inside a hangar. Ryders to cover legal fees and court expenses are also on the table.
- Limitations – As with any type of insurance, hangar keepers’ liability insurance does come with limits. Most policies don’t cover losses incurred by events outside of the operator’s control, like natural disasters.
Hangar operators are known to enhance their liability insurance with a complementary premises liability policy. This sort of enhancement would protect an operator against claims made by third parties for property damage or injuries occurring on the operator’s premises.
Not a Substitute for Aircraft Insurance
Aircraft owners expect that hangar owners and operators will carry sufficient liability insurance. That said, hangar keeper’s liability insurance is not a substitute for an aircraft owner’s own insurance. It is intended only to add a secondary layer of protection for the hangar keeper or operator.
I should point out that hangar keepers’ liability insurance is distinct and unique from other forms of aviation insurance in several ways. For example:
- Business Insurance – It protects businesses and their employees against liability claims, rather than aircraft itself. That makes the product a business insurance product more than anything else.
- Specialization – Hangar keepers liability insurance is a specialized product tailored to aircraft and parts in storage. It does not cover general aviation-related exposure.
- Negligence – The insurance is designed to cover negligence on a hangar operator’s part. Therefore, things outside of the operator’s control are not covered. Other aviation products would be required for those types of things.
- Aircraft Only – Because it is a business insurance product tailored specifically around liability, the insurance only covers aircraft and parts. It does not cover personal injury claims, even when injuries are sustained on the policyholder’s premises.
Aviation is a very complex industry where liability is concerned. For that reason, aviation insurance comes in many forms. Hangar keepers’ liability coverage is just one example of a highly specialized form of insurance tailored to one specific need.
Interaction With Other Forms of Insurance
Due to its highly targeted nature, liability insurance for hangar keepers is considered a complementary product that interacts with other forms of insurance. I have already mentioned premises insurance that protects against personal injury. There is also completed operations liability, a form of aviation insurance that provides companies with the equivalent of umbrella protection.
Hangar keepers’ liability insurance interacts with other products by providing a buffer so to speak. That buffer protects aircraft owners and their insurance carriers against damage that occurs while an aircraft is being housed in a third-party hangar. Under such circumstances, the owner’s aviation insurance would require that the hangar operator’s liability policy be the first line of defense against claims.
Additional Coverage for Hangar Operators
As helpful as hangar keepers’ liability insurance is, it’s not the only type of insurance hangar operators should have. Operators definitely need premises liability coverage to protect against accidents and injuries. This includes slips and falls.
Operators should have legal liability coverage just in case they find themselves on the wrong end of a lawsuit. Ground risk hull coverage, building insurance, and business property insurance are also must-haves for hangar operators.
And now you know a little bit about hangar keepers’ insurance policies. You may never need to recall the information, but here is hoping you found it interesting, nonetheless.
