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Aviation Insurance Glossary

This glossary lists common terms used in Aviation Insurance

  • Additional Insured – a person or persons other than the original named insured, who are protected under the terms of a policy.
  • Aircraft Liability Insurance – protects insureds from claims by other parties (“third parties”) for bodily injury or death and property damage. The claim has to result from an occurrence related to the operation of the aircraft.
  • Guest Voluntary Settlement – also known as admitted liability, provides coverage to a passenger who suffers certain forms of bodily injury whereby a settlement is offered on a predetermined basis in exchange for a release of liability.
  • Hull Insurance – coverage for physical damage done to the aircraft. It is not liability coverage and is therefore triggered by a covered event, regardless of the reason for the damage or loss.
  • Industrial Aid – refers to corporate-owned aircraft that are used for the transportation of executives, employees, customers and guests, and which are flown by full-time professional pilots.
  • Medical Payments – coverage that pays medical, surgical, hospital and funeral expenses up to the applicable limit, regardless of the liability of the insured.
  • Named Insured – the actual policyholder who is specifically named on the policy. Named insureds are responsible for premium payment, have the authority to cancel or make changes to a policy, will have a say in the claims process, and are included on any claim checks that are issued.
  • Open Pilot Warranty – a clause in the policy that will state the minimum qualifications for a pilot to meet who has not been previously listed by name on the policy as a pilot. A pilot who is named on the policy or who “meets the open” simply affirms to the named insured that the pilot’s legal and proper use of the aircraft will not void the named insured’s coverage. It does not necessarily mean that the named pilot will be covered under the liability protection of the policy.
  • Pleasure & Business – refers to aircraft that are owned and/or operated by pilots who are not employed as full-time professional pilots.
  • Smooth Limit – a limit of liability that offers a combined single limit of coverage that applies to all bodily injury and property damage claims. A specified maximum amount can be paid out from a covered occurrence in any combination – passenger bodily injury, other person’s bodily injury or property damage.
  • Sub-Limit – usually a combined single limit of coverage that applies to all bodily injury and property damage claims, however, a reduced amount of coverage from the single limit is available to pay for claims resulting from bodily injury.
  • Subrogation – a doctrine that gives an insurance company the right to attempt to recoup some or all of the money they have paid on behalf of insureds. They do this by proving that another party was legally responsible for the loss and that the party has the financial ability to reimburse the insurance company.

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