Does Your Firm Use Contractor Pilots?

03/07/2022 Written by: Stuart Hope

When your company employs a pilot, the decision on whether to hire the aviator as an independent contractor or an employee should be made only after careful consideration.

Sound Familiar?

One of your employee pilots has requested time off for vacation or sick leave. Your aviation manager locates a qualified pilot who flies the same make and model aircraft for another owner on the field to fill in and take the trip. The arrangement appears to be a very convenient solution made all the better by hiring the pilot as an independent contractor, thereby avoiding the administrative hassle of employment contracts, payroll deductions, and other costs associated with making him or her an “employee”.

Not so fast. This convenience comes with serious downsides—the most critical being exposure to a lawsuit resulting from the bodily injury or wrongful death of the independent contractor pilot. 

As independent businesspersons, contractors are expected to provide their own liability insurance and workers compensation. For this reason, your insurance policy will not respond to any pilot injuries that should have been covered by a workers compensation policy. Second, the independent contractor may be an approved pilot (which validates only your coverage) but he/she personally is not provided legal liability protection under your policy. In fact, most independent contractor pilots do not carry any insurance, often because they are not aware they need it, but even if they were, it is not available or cost prohibitive. 

In the event the contract pilot who doesn’t carry workers comp coverage is injured while on the job, a court is likely to rule that the contract pilot was an employee by definition and should have been covered under your workers compensation insurance.  You could be faced with paying significant retroactive premiums, employment taxes and interest.

If the pilot is ruled an independent contractor, then the protection generally granted an employer under the workers comp bar (which in essence prohibits an employee from suing their employer for job related injuries) is removed, thereby allowing the independent contractor or his estate to sue the aircraft owner for bodily injury. Since greater than 85% of all aircraft accidents are caused by pilot error, logically you would think it unlikely the pilot, or their estate, would have grounds to sue you or your company for their own negligence. But things often aren’t logical, and the fact you are the one with the deep pockets puts you squarely in the crosshairs after an aircraft accident.

As you can quickly see, there’s a lot more than meets the eye when using independent contractor pilots.    The distinction between who is an employee and who is an independent contractor is no different with pilots than with any other person you employ. The situation remains one of the most misunderstood areas of employment law in business today.


Option 1: Don’t use independent contractor pilots. This isn’t really a practical solution, however, because finding a pilot to fill in on short notice is difficult.  But beware—most supplemental pilots available immediately are probably flying for another aircraft operator on the field and are just trying to do your pilot a favor by filling in. They won’t have their own liability or workers compensation insurance for the few flights they might make for your company. 

Option 2: Use a well-known temporary pilot staffing company that can issue proof it provides their pilots with workers compensation and adequate liability protection. 

Option 3: Hire the aviator as a part-time employee. This process is costly and time consuming, but it eliminates the liability and work comp exposures and at the same time provides protection for the pilot filling in. This option is probably the best solution.

Option 4: If you decide to continue using independent contractors, add them to your workers comp insurance and endorse your aircraft insurance policy to add them as an additional insured and provide a waiver of subrogation on the hull coverage.

Operators must satisfy many masters in the aircraft ownership world (IRS, FAA, Insurance), which often is very complicated. Your best strategy is to seek professional help to find the solutions that best meet your needs. Your AssuredPartners Aerospace insurance broker will be one of your most valuable allies, as they see these scenarios every day. Use that resource. Contact the AssuredPartners Aerospace team today.

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