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Risk Management and Insurance – Creating a Twin Win

Article published in The Twin Cessna Flyer

Someone once told me, “You can’t score on defense.”  Unless you count recovering a fumble in the end zone for a touchback in football, no sports team scores on defense because the second they get the ball back, they’re on offense. 

20Now consider this idea in the context of operating your Twin Cessna.  Your insurance policy acts like a strong defense in case something goes bad wrong.  Risk management, however, is like an offensive powerhouse that can eat up the clock, score big points and keep your defense resting on the sidelines until needed.  And like any good team, you need the proper combination of both good offense and good defense to keep you in the Twin Cessna ownership game.

Now don’t get over or underwhelmed by the concept of risk management.  It is exactly what it says it is:  You are managing the inherent risks of operating airplanes because you will never completely eliminate the risks.  We naturally “manage risk” every day before we walk out of the house, as we drive, go for a jog or conduct just about any other life activity.  The difference when it comes to aviation is intentionality.  There is no auto-pilot for aviation risk management.  You must constantly focus your thoughts both in the present and out into the future to evaluate hazards, weigh risks and determine alternative courses of action to keep the risks as low as possible – while still successfully completing the mission.

All the talk you hear today about Safety Management Systems (SMS) is nothing more than intentional risk management!  In our fast-paced world of multi-tasking saturation, information overload and the resulting chaotic thought processes, we need a systematic element to help bridle those thoughts and make us more deliberate aviators.

SMS provides an intentional, organized framework for making better aeronautical decisions that lead to safer operations.  A key ingredient of SMS and a great example of how it works, at least in part, is through the use of a Flight Risk Assessment Tool (FRAT).

Utilizing a set series of questions with scored replies, the FRAT forces you to analyze risk and make safety adjustments prior to flight.  Some of us haven’t been this intentional about aviating since flight training and the notion of using a FRAT is a monumental paradigm shift we will probably all fight at some level.  But if we choose not to be sticks in the mud about it, I believe it can become as natural as filing a flight plan.

In an ongoing risk management effort, our company is exploring the implementation of a formal SMS because of the benefits it provides even for a small Cessna 340/182 operation like ours.  And though the FAA won’t require it for part 91 Twin Cessna operators for the foreseeable future, don’t be surprised if soon insurers are asking whether you have implemented SMS and begin offering incentives accordingly.  We’ll call that scoring points with your underwriter.

What about that defense?  An effective defense stops the other team quickly and gets you the ball back.  And of course no good defense waits until game day to play.  Long before the real game begins, the defense has been through many practices and drills to make sure they’re ready for action when needed.  The same should be true of your Twin Cessna insurance policy.

Your insurance policy plays an important role in providing a strong defensive shield for you and your airplane – as long as it is set up properly – so that claims can be settled fairly and expeditiously, allowing you to get back in the air as soon as possible.  When the policy is purchased or renewed, that is a great time for “practice.”  This is your chance to make sure coverage limits are adequate, that coverage structure accurately represents how the plane is truly owned and operated, and known coverage gaps are plugged.

If you want a “twin-win” for your Twin Cessna, beef up your offense by implementing at least some of the current best practices for risk management and sharpen that defense by making sure you have the proper insurance coverages in place long before you need them on the field!

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