Just trying to get an idea for the norm out there. For contract pilots- do you carry your own liability insurance? Do you present clients with a hold harmless agreement or something along the lines of if worst case scenario occurs you/your family can not be held personally liable? I haven't done much contract work and am wondering if it is worth dabbling in if I can be held personally liable for the dreaded "pilot error" verdict. If the aircraft has liability insurance and I fit the bill for the pilot requirements on the policy, is this sufficient?

 

Well, you can get your own liability insurance, which for a pilot will be very expensive.

Two other things you can do, which are more simple but require cooperation from other entities.

1) Make sure you are protected under the aircraft insurance policy. This is different than being an approved pilot. You can be protected if you are added as a named insured on the aircraft policy. "Approved" protects the owner/operator only in that you possess the requirements to pilot the airplane--being approved does not extend to protecting you...it protects the owner/operator. Being protected will protect the pilot from personal liability from damage to caused to other people/property.

2)Obtain a Waiver of Subrogation from the Insurer. Ordinarily, if an insurer makes a payout to another party due to a pilots negligence/fault, the insurer can turn around and sue the pilot to recover what it paid out to the other party. The Waiver of Subrogation is a promise that the insurance company will not turn around and come after the pilot to recover a payout. This will protect the pilot from liability from damage caused to the aircraft itself.

As always, insurance is very complex. Make sure you speak with a professional---I'd start with the aircraft insurer.

 

Some contract pilots form their own LLC. That way any entity seeking legal action against the pilot can only procure what is contained in the LLC. Of course I'm not a lawyer, so if you choose this route you'll want true legal advise.

 

I'm not an attorney, but I have done alot of research into this very topic. While an LLC can protect a business owner from business debts and claims--like breach of contract, debts owed for service rendered, etc, my research shows that an LLC will not protect someone from personal liability due to negligence, which is what I think is the type of protection contract pilots seek (read the following taken from Smart Money small business website):

"A corporation generally won't protect your personal assets from liabilities caused by your own professional malpractice or negligence. Nor will incorporating protect you from liabilities resulting from your own tortious acts, whether you commit them on business or not. Tortious acts are legal misdeeds that don't have to do with contractual matters. An example is injuring someone or causing property damage by driving your car carelessly. An LLC (or SMLLC) generally won't protect you against these types of liabilities either. Therefore, you'll probably still need business insurance coverage to adequately insulate yourself against risk."

 

Thanks for all the input. Does anybody know if it is customary/standard to be "protected" by the aircraft insurance company. Will they laugh their heads off if I want this added to the policy?

 

Sorry to ressurect this thread, but I am looking for information like what was being discussed. I am trying to get my contract pilot business off the ground, and before consulting an attorney I wanted to gather some information from people who are doing this now. Specifically those who have formed an LLP. If you have any comments, tips etc feel free to pass that along!

 

Good advice. ALways make sure you are on the operators insurance. You are not protected from negligance with an LLC, just financial matters. I had an LLC for about 4 years it works great just remember your certificates are still on the line.

 

I dont think there is ANY insurance that can protect you from the FAA... if there is, sign me up!