Let No Good Deed Go Unpunished

Loaning your aircraft to someone can be a generous gesture, but it comes with significant liability risks that you should be aware of. Here are some key points to consider:

1. Vicarious Liability

In some states, aircraft owners can be held vicariously liable for accidents or incidents involving their aircraft, even if they were not in control or possession of the aircraft at the time. This means you could be responsible for damages resulting from someone else's actions.

2. Insurance Coverage

Ensuring adequate insurance coverage is crucial. You should verify the person you are considering loaning your aircraft to meets the pilot requirements of your policy, the amount of reimbursement you plan to receive is within the insurance policy’s allowable limits (usage clause), and the person you are loaning the aircraft to either has adequate non-owned aircraft liability coverage, or you have added him/her to your insurance policy as an additional insured/waiver of subrogation.

3. Contractual Protections

Drafting an agreement can help mitigate risks. This agreement should outline the responsibilities of the borrower, including agreed-upon costs, insurance, and operational procedures. It should also include indemnity clauses to protect you from liability arising from the borrower's actions. For example, this might include addressing diminution of value after a loss.

Conclusion

While loaning your aircraft can be a kind gesture, it's essential to be aware of the liability risks involved. By understanding these risks and taking appropriate precautions, you can help mitigate the exposure you are taking on.

It is highly recommended that you have a conversation with your AssuredPartners Aerospace broker to discuss the pros and cons of loaning your aircraft so you can best decide whether the cost/benefit makes sense for you. If you have any questions or concerns, please contact us at aerospace@assuredpartners.com.