When one owns or operates a car, boat or an aircraft, to name a few, a potential for an accident exists. Certainly that is a given. But when the accident involves bodily injury or property damage to others, someone is expected to pay. And in our litigious society--pay big.

Few among us can afford the medical bills related to the injuries of others or the cost to repair the property of others. So we pay a premium and transfer our risk of loss to an insurance company. A limit of liability protection is purchased which the carrier can use to pay off the loss on our behalf. Should the limit be inadequate, the difference between the cost of the loss and what the carrier pays is what will come out of the negligent party's pocket.

It is a mistake to assume the insurance carrier will pay out in all circumstances just because a policy premium was paid. Many things can void coverage. Two typical examples are letting unapproved pilots operate the aircraft or to use it for a purpose not approved in the policy. But our discussion pertains to liability situations where coverage does apply--at least to a degree.

Accidents involving bodily injury and property damage to others revolve around Liability Coverage. The insurance policy pays provided the policyholder is found to be at fault--meaning negligent. Negligence is the failure to use reasonable and prudent care toward one to whom a duty is owed.

Often negligence is not clear cut. When that happens another policy feature is triggered--Free Defense. The insurance carrier, at their expense, provides the policyholder with an attorney. That attorney's goal is to prove the policyholder was not at fault or not solely at fault if at all possible. They will try to demonstrate the policyholder was not negligent.

Free Defense is a significant policy benefit. We could ill afford to hire an attorney specializing in aviation law to represent us. Most could ill afford to hire 'any' attorney for such litigation. But without liability insurance that is what must be done to protect one's assets.

There can be different degrees of negligence. One might be partially negligent and thus have to shoulder only a part of the loss. However, this may depend on the laws of the state where the litigation is brought.

After an accident it is human nature to apologize to the injured parties and accept responsibility. That is the wrong thing to do. Consider the following two loss examples.

You own an ASW 20 which is parked next to a Blanik. Both gliders are properly tied down. A storm arises and the ASW 20 is pulled up from its tie down and lands on the Blanik. The owner of the Blanik, through no fault of his own, suffers $10,000 in damage and he wants you to foot the bill. But you feel the loss occurred through no fault of yours and you turn him down. He sues.

Without insurance you might pay the $10,000 in lieu of incurring the expense of hiring an attorney to represent you in what might be months of litigation at a rate of $250 per hour.

With insurance, the loss is reported to the carrier who hires an attorney for you at their expense. The case goes to court and the judge decides the loss was caused by an act of God and rules no negligence on your part. Case closed. If the Blanik owner didn't carry hull insurance on his glider he is out $10,000.

In the second case your canopy falls off during takeoff and hits someone on the ground. This was the first flight since getting the glider back from a mechanic who recently installed a new canopy. The injured party sues for $100,000.

Once again, without insurance you would have to hire your own representation. Even if you win you still lose as its doubtful you could recoup your legal fees in such a case.

But with insurance the carrier provides an attorney at their expense. The case goes to court. It is determined the mechanic installed the canopy incorrectly and was responsible for 75% of the loss. The aircraft owner is responsible for 25% of the loss as a proper pre-flight inspection might have given a hint something was wrong. The insurance carrier pays $25,000 of the $100,000 out of the liability insurance coverage.

Accidents involving bodily injury or property damage to others are very unfortunate. The desire to accept the entire blame may be overwhelming. Remembering there could be mitigating circumstances which may demonstrate only partial or even no negligence is very important. Be cautious of what you say after an accident. Be courteous and helpful but admit to nothing till you've had a chance to speak with your insurance carrier.

Soaring Magazine
(Updated 9/30/03)