AVIATION INSURANCE

AVIATION INSURANCE Blais Aviation Insurance Services Insurance Professional & Pilot Philip Blais 1 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES TABLE OF CONTENTS Introduction Angel Flight Coverage Damage History Decreases Value Insure To The Value Of The Loan Reimbursement Or Rental Reimbursement From Your Own Company Slide 7 Slide 8 Slide 9 Slide 10 – 11 Slide 12 - 14 Slide 15 2 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES TABLE OF CONTENTS The Aircraft Sale Is Final Hot Starts On Turbine and Jet Engines Warranty or Insurance Canadian Travel Mexico Travel Age vs. Price Slide 16-22 Slide 23 Slide 24 Slide 25 Slide 26 – 27 Slide 28 Approved Annual Training Slide 29 3 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES TABLE OF CONTENTS Too Small To Require Training Why are contracts relating to my aircraft important from an insurance perspective? How much liability coverage is enough? How do I determine the proper insured value for my aircraft? What measures can I take to improve my aviation insurance program? What’s the deal with single-pilot operations? Slide 30 Slide 31 Slide 32 – 34 Slide 35 Slide 36 – 38 Slide 39 4 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES TABLE OF CONTENTS Should we carry war insurance or TRIA insurance or both? Who may use our airplane? Can pilots be sued? How is a pilot who is injured (or worse) compensated after an accident? What is a Broker of Record Letter (or Agent of Record Letter) and what does it do? Slide 40 Slide 41 – 42 Slide 43 Slide 44 Slide 45 – 47 5 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES TABLE OF CONTENTS How can I get the lowest available rate on my insurance? Who can pilot my aircraft ? Pilot requirements and open pilot warranty. Who Are The Aviation Markets? Glossary Aviation Insurance Aircraft Insurance Aviation Facts Coverages Provided By Blais Aviation Insurance Services Aviation Pictures Closing Slide 48 – 52 Slide 53 – 61 Slide 62 – 71 Slide 72 – 77 Slide 78 – 97 Slide 98 – 106 Slides 107 – 118 Slide 119 – 125 6 AVIATION INSURANCE INTRODUCTION This presentation, provided by Blais Aviation Insurance Services, a division of the Blais Group, is meant to answer a number of the questions often asked by people concerned about aviation insurance. In addition, an overview of the market with information relating to key aviation insurance terms and insights about Blais Aviation Insurance Services is being provided. Blais Aviation Insurance Services is considered a leading facility in the design, placement and service of aviation related insurance products. 7 AVIATION INSURANCE Angel Flight Coverage If I fly an Angel Flight, will this void or cause a problem with my insurance coverage? No, not if the Angel Flight is done without any compensation to the aircraft owner or operator. Under "pleasure and business" or "industrial aid" purposes of use, the key is if you are compensated for the use of the aircraft. In this situation, clearly, no charge is made. You may want to review your liability limits, however. Many aircraft owners purchase relatively low limits of liability either to save premium dollars or due to a lack of availability. The increased responsibility for your Angel Flight guest may increase your exposure in the event of a mishap. 8 AVIATION INSURANCE Damage History Decreases Value If my aircraft is damaged in an accident, the hull value can be significantly decreased. This damage history seems to live forever. Is this loss of value covered by my aircraft hull insurance policy? No! Diminution of value is not covered under any aircraft hull insurance policy on the insured aircraft. If someone else damages your aircraft and they are found to be negligent, they are liable for the loss. In this situation, their liability coverage may reimburse you for the (negotiated) estimate of the decreased value to your aircraft. 9 AVIATION INSURANCE Insure To The Value Of The Loan The value of my aircraft has fallen significantly during the past three years. My lien at the bank is more than the aircraft is currently worth. It is time to renew my insurance. I would prefer to insure the aircraft for its true value and save the premium dollars but the bank requires me to insure to the value of the loan. What to do? Page 1 of 2 This is one of those strange snap-shots in time where economic pressures have caused some aircraft values to fall faster than loan repayments. There are three conflicts or problems with this situation. The banker wants full protection for the asset collateralizing his loan. This is understandable. The insurance underwriter does not want to significantly over insure the risk. This could cause what the insurance community refers to as a moral hazard. The insured does not want to pay more insurance premium than is necessary. 10 AVIATION INSURANCE Page 2 of 2 The only solution is negotiation. The insurance underwriter usually will agree to insure an aircraft for the "Blue Book" (Aircraft Price Digest) published value plus 10% to 20%. This variation could be even higher with documentation of extra or updated equipment or aircraft modification. Sometimes the underwriter will insure for the loan value if he understands the bank's requirements. The banker may be willing to reduce his demand to insure to the value of the loan if your financial strength is adequate and you guarantee any shortfall in coverage. Some of our clients are simply pledging other assets to secure the loan. In either case, unless you insure to the pay-off value of the loan or to the market value of the aircraft (Bluebook), you may be purchasing less insurance than it will take to make you whole and pay off the lien. In the event of a total loss, you would have to pay the difference to satisfy the debt to the bank. It then must be pointed out that the small savings in premium may not justify the exposure. 11 AVIATION INSURANCE Reimbursement Or Rental I have a friend who wants to use my aircraft. He will reimburse me for the cost of operating the aircraft and will hire his own pilot. Is this covered under my pleasure and business policy? Page 1 of 3 This arrangement may not be as simple as it seems. Good business would dictate that you have a written agreement. The best of friends may find it difficult to agree after a loss occurs. To assure full compliance with your insurance policy, we recommend that a copy of the insurance policy be included as a part of this formal lease agreement. Depending upon the terms of this lease, you may have problems with your insurance. Some "pleasure and business" policies allow for reimbursement of direct operating expenses. This may be defined by the underwriter as an amount equal to one time the cost of fuel and oil. In other policies, the flight is approved if no profit is made. Give special attention to your aviation insurance policy's cost reimbursement requirements and definitions. 12 AVIATION INSURANCE Page 2 of 3 It is always a good idea to advise your underwriter and seek his approval. In most cases, the lessee will want to be covered as an additional insured under your policy and will request a certificate of insurance confirming coverage. Another area of concern when leasing your aircraft to a friend is that he abides by the terms and conditions of your insurance policy. If the lessee doesn't understand aviation insurance, he may inadvertently void coverage by violating policy requirements. For example, if your friend is furnishing his own pilot, he must either meet the open pilot requirements of your policy or be specifically approved by your underwriter. Your friend must be warned about changing pilots. Anyone allowed to operate your aircraft must meet these pilot requirements. Just because the lease is approved by the underwriter doesn't mean that the lessee can ignore the policy's provisions. 13 AVIATION INSURANCE Page 3 of 3 Many of our clients enter into such agreements with friends. We refer to these as "dry leases". We advise the underwriter of these leases and allow him to make a nominal premium charge. We usually ask that the "dry lessee" be named as an additional insured under the liability section of the policy with a waiver of subrogation on the hull. Subrogation is the assumption of an insured's rights of recovery by the insurance company. If an insurance company pays a loss on an insured's aircraft that was the result of someone else's negligence, the company assumes the insured's legal rights of recovery from the negligent party. A waiver of subrogation is when the insurance company relinquishes their right of recovery. Some underwriters are reluctant to allow dry leases. Others have no problem with this practice if only one or two lessees are involved. At the risk of underwriter rejection, it is always best to have full disclosure to the underwriter in the event of a loss. If you are allowing too many friends to use your aircraft, your underwriter may look at you as a rental operation. Keep in mind, changing to a rental purpose of use may be expensive. 14 AVIATION INSURANCE Reimbursement From Your Own Company I own my aircraft in a shell corporation and charge my own company for its use when it is operated on business. Does this cause an insurance problem? Most underwriters understand that this is an accepted and frequently used method of arranging aircraft ownership. Often attorneys and accountants shelter liabilities or improve tax situations by using shell corporations or LLCs. The best way to avoid any conflict with your insurance policy is to advise the underwriter of your intentions. Most companies want to be added as an additional insured under the policy. This should be confirmed by a certificate of insurance. Usually, the underwriter makes little or no premium charge for such a request. Many of the broader policies define "insured" as any person riding on the aircraft or any organization responsible for its use. Having your company added as an additional insured and being a certificate holder is still the best arrangement. 15 AVIATION INSURANCE The Aircraft Sale Is Final Have you ever purchased an aircraft and wondered when the sale is final and when you are responsible for insuring the aircraft? Is it when you post your deposit? Is it when you pay money to the escrow agent or when you sign the bill of sale? Is it when the aircraft is delivered to you? Page 1 of 7 These are questions that should be asked to determine who should insure the aircraft. They say, "The Devil is in the detail". This certainly applies to the change of aircraft ownership. Why is it so important? We have heard stories of overlapping policies on the same aircraft at the time of purchase. Which one pays in the event of a loss? Both insurance companies could point to the other, hoping to avoid a claim. In like fashion, there are stories where the seller drops coverage and the buyer has not yet put coverage in force. Oops. 16 AVIATION INSURANCE Page 2 of 7 In order for insurance to be valid and collectable, you must have an insurable interest in the aircraft you are insuring. Insurable interest means you are at risk of having an economic loss if the aircraft is damaged, stolen, or destroyed. Second, there must be an occurrence resulting in damage to the aircraft. But who has the insurable interest? If my aircraft were destroyed, you would suffer no economic loss and thus you could not purchase insurance or collect a settlement on my aircraft. If you are purchasing someone else's aircraft and the sale is not final, you are not at risk of an economic loss until the sale is final. So, when is the sale final? 17 AVIATION INSURANCE Page 3 of 7 When the sales agreement is signed? When the bill of sale is signed? When the title is transferred? When the aircraft is delivered? When funds transfer? An aviation claims attorney answered the question by saying "it depends". It depends upon the State law in question. In some jurisdictions, the case law says that title is transferred when the Bill of Sale is signed. Others say the title is transferred when the Bill of Sale is recorded by the governing agency, in the case of aviation, the FAA. 18 AVIATION INSURANCE Page 4 of 7 Of course, a title must transfer free and clear. This means that there must be a complete exchange of funds. No sales contract is fulfilled without consideration. But from the way it is stated by my attorney friend, in certain States you could have an exchange of funds but the sale is not final until the Bill of Sale is recorded. The recommended way to conduct a sales situation is with a properly worded sales contract and the involvement of an escrow agent and your attorney. Such a contract will outline the sale process. Many professional aircraft dealers and traders employ the services of an escrow agent. For a small fee, the escrow company accepts funds from the buyer and accumulates the necessary paperwork to close the sale. Upon confirmation from both buyer and seller, the escrow agent accepts the paperwork and releases the funds simultaneously. The necessary documentation is recorded with the FAA and the deal is done. 19 AVIATION INSURANCE Page 5 of 7 The sales contract should contain a statement giving the escrow agent the authority to handle the closing. Wording such as, "Upon the Escrow Agent being advised by the Seller and the Purchaser that the terms and conditions of this Agreement have been met and the Escrow Agent has all of the documents required for closing and holds the Purchase Price, the parties agree that the Escrow Agent shall concurrently (1) release the Purchase Price to Seller, (2) file a Federal Aviation Administration (FAA) Bill of Sale, Form 8050-2 conveying title to the Aircraft on behalf of Purchaser with the FAA and (3) forward Seller's original executed Warranty Bill of Sale to Purchaser. The risk of loss, injury, destruction or damage to the Aircraft by fire or other casualty or occurrence shall transfer to Purchaser upon transfer of title documents." The important word is concurrently. Using an escrow agent eliminates much of the guesswork as to when the sale is final and when insurable interest shifts to the new owner. 20 AVIATION INSURANCE Page 6 of 7 My attorney friend said, "As for insurable interest, this is another question in its entirety. Was there a deposit? Was it refundable? Was there pecuniary interest in the aircraft? After you answer these questions, will an insurance policy cover it? You must look at the specific policy wording. Most policies do not cover title or ownership disputes." Now, we are back to a good sales contract and the disciplines of a good escrow agent. Unfortunately, many aircraft change hands without a proper sales contract. In some cases, the only contract is verbal. In other cases, the sales agreement is just assumed. 21 AVIATION INSURANCE Page 7 of 7 The absence of a written contract is fine if there is no loss and there are no disputes during the transaction. Problems do occur, however. If the aircraft suffers a physical damage loss during the sale process and there is no insurance in force, which party suffers the loss? If there is an insurable loss and the old owner and the new owner both have an insurance policy in force, which one pays? If a disagreement does arise, an attorney friend said, "Only the attorneys win". I realize that the aircraft sales process is not really an insurance question. It is a legal question and should be addressed by an attorney. I am certainly no attorney. This is why I discussed this article with several attorneys and professional aircraft dealers. All recommend the use of an escrow agent and a formal closing. Involve an attorney who is familiar with the laws of your State. 22 AVIATION INSURANCE Hot Starts On Turbine and Jet Engines Hot starts are not covered under standard aviation hull insurance policies. Aviation physical damage policies specifically exclude engine losses resulting from internal heat. 23 AVIATION INSURANCE Warranty or Insurance My windshield broke in flight at 28,000 feet. No bird strike, it just broke. Is it covered? No. This would be considered to be wear and tear. If a bird or some other object had hit the windshield, the hull insurance policy would respond. This is possible but not likely at 28,000 feet. My suggestion is to investigate to see if this is a recurring problem with your make and model aircraft. It could be a problem with the manufacture or installation of the windshield. 24 AVIATION INSURANCE Canadian Travel I am planning a pleasure trip to Canada . Do I have coverage under my aircraft insurance? Do I need any special papers or certificates of insurance to present to the authorities? Yes. Canada is covered under the territorial limits of your standard aviation insurance policy. No. You do not need any special certification to enter Canada on a non-commercial flight. Unlike Mexico , no special insurance policy and no certificate of insurance are required for a non-commercial flight into Canada . It is recommend that a pilot carrying a copy of his or hers insurance policy, just in case you need to refer to it. 25 AVIATION INSURANCE Mexico Travel I am planning a pleasure trip to Mexico . Do I have coverage under my aircraft insurance? Do I need any special papers or certificates of insurance to present to the authorities? No. Mexico is not covered under the territorial limits of your standard aviation insurance policy. Yes. You do need special certification to enter Mexico on a non-commercial flight. Mexico requires a special insurance policy and certificate of insurance are required for a non-commercial flight into Mexico. With the purpose of facilitating General Aviation Flights to Mexico, information has been prepared by SENEAM, the Mexican government Air Traffic Service provider, responsible for the Air Navigation Service in Mexican Airspace. A copy of this document can be found on the Blais Aviation Insurance Services Website. 26 AVIATION INSURANCE Mexico Travel It is important to obtain adequate protection when flying into Mexico by private aircraft. Blais Aviation Insurance Services can arrange a Mexican Aviation Liability Policy that meets the requirements of the Mexican authorities. We offer a policy, written in Spanish and English and prepared in our office, through one of the largest Mexican Insurance Companies. We give immediate service and the policy is normally issued the same day application and money are received in our office. Why Mexico Insurance? American Insurance is not recognized in Mexico. According to Mexican Law, foreigners flying into Mexico must purchase insurance from an authorized Mexican Insurance Company. Since we issue the policies directly in our office, we can mail your policy to you or you can come by to pick it up. 27 AVIATION INSURANCE AGE vs. PRICE I am 67 years old. My current insurance company has insured me for five years. I have been given a premium quotation for significantly less money than my current underwriter quoted to renew my account. Should I change and save the money? This is a judgment call. Obviously, we don't want to waste money. But, the age factor is a real problem when purchasing insurance. If your current insurance company has the reputation of continuing to work with their clients as they age, you may want to pay the additional premium and stay with your current company. 28 AVIATION INSURANCE Approved Annual Training I don't want to go to SimCom or FlightSafety International for annual training. It is too expensive, too far away, and takes too long. I have a local CFI who is very good. Can he give me my annual training? The probable answer is no. It depends upon the type of aircraft you fly. With larger aircraft or high performance aircraft, many underwriters require annual simulator training. Smaller, less sophisticated aircraft may not require simulator-based training but may require a formal school. Most insurance companies have a list of approved training facilities for each make and model of aircraft. Your local CFI is probably not on the underwriter's approved list. This does not mean the local guy does not do a good job; he simply has not formalized his school and submitted the necessary information to the underwriting community to be recognized. In fact, most local instructors do not want to do the work necessary to obtain underwriter approval. 29 AVIATION INSURANCE Too Small To Require Training I have a Cessna 172. Is annual recurrency training necessary to comply with underwriting requirements? Small, light, single engine aircraft, under 200Hp with less than six seats usually are considered primary trainers. Most underwriters do not require annual training on these aircraft. This does not mean that an occasional refresher is not advisable. There is a difference in training for the purpose of compliance and training for the sake of safety. If you are training just to satisfy the underwriter, your priorities may be wrong. Don't forget the FAA Wings Program. You may have one in your area. This is an excellent opportunity for the light aircraft owner to get an annual flight check without extreme cost. Many underwriters recognize and recommend the FAA Wings Program. 30 AVIATION INSURANCE Why are contracts relating to my aircraft important from an insurance perspective? Did you know that every aviation contract or agreement has the potential to limit or even void your insurance coverage? Most contracts you enter relating to your aircraft contain insurance and/or hold harmlessindemnification clauses. Signing these agreements contractually obligates you to comply with the provisions they contain. If the insurance-related stipulations fall outside the scope of your coverage, the assumed risk becomes yours. Not good. All agreements, including Purchase Agreements, Bank Loan Agreements, Maintenance/FBO contracts, Hangar Agreements, Charter Agreements, etc. should be reviewed by appropriate legal counsel for any legal ramifications with a copy sent to your insurance broker to review from an insurance perspective. Hold harmless agreements can be particularly troublesome. Reference our article entitled “Insurance Perspective on Hold Harmless Agreements." Request a copy from Blais Aviation Insurance Services. 31 AVIATION INSURANCE How much liability coverage is enough? Page 1 of 3 1. Since there is no definitive method available to determine the appropriate liability coverage limit to select, your response to the following questions can help guide you in selecting a reasonable limit based on your exposure; Number of passenger seats in the aircraft. Obviously, an aircraft with 14 passenger seats presents a greater exposure and will require a higher liability coverage limit than one with 7. 2. 3. Average passenger load per flight. Again, if your average passenger load per flight is 5, you would need to carry a higher coverage limit than if it was 2. 32 AVIATION INSURANCE Page 2 of 3 4. Composition of passengers (Employee vs Guests). If the majority of passengers carried on the aircraft are employees, you may be able to justify a lower liability limit since a properly structured Workers Compensation program should be the sole remedy for injuries to employees. Conversely, if the majority of passengers are guests, you would need to select a higher liability limit. What assets need to be protected? Don’t let a holding company give you a false sense of security. Savvy plaintiff attorneys will attempt to pierce shell companies and corporate veils in an effort to get at the “real money” whether it be a larger corporation or an individual’s net worth. 5. 33 AVIATION INSURANCE Page 3 of 3 6. If you have an umbrella policy that covers the aviation exposure, you will need to make sure your aviation liability limit meets the minimum required umbrella limit. Generally speaking, since it is impossible to determine the exact coverage limit you need, it is best to buy as much as you can reasonably afford. Obtain quotes for alternate limits each year, as rating of this coverage can vary greatly year to year. 34 7. AVIATION INSURANCE How do I determine the proper insured value for my aircraft? Unlike many other property policies, aircraft policies are usually written on an “agreed-value” basis. Therefore, you can over insure and under insure to your detriment. If you over insure, the insurance company will typically elect to repair the aircraft even when there is major damage – leaving you to deal with significant damage history. If you under insure, the insurance company may elect to pay you for the total loss and sell the salvage – you would lose your equity. The proper insured value to carry is the amount of money it would take to purchase another aircraft exactly like yours (i.e. same year, make and model, etc. – not a brand new one). The aircraft dealer you purchased the aircraft from should be able to give you the best idea of its current value. In addition, your insurance broker should have resources to help give you an idea of this value. This coverage limit should be reviewed annually on renewal and adjusted accordingly. 35 AVIATION INSURANCE What measures can I take to improve my aviation insurance program? Page 1 of 3 A. Develop, implement and maintain a documented flight safety program. Address critical areas such as approach and landing accidents and controlled flight into terrain (ALAR/CFIT), dissimilar aircraft operations, runway incursions, ground handling safety, etc. Not having accidents or incidents in the first place in order to keep premiums down is fundamental risk management! Adhere to an Pilot Operating Handbook. 36 B. AVIATION INSURANCE Page 2 of 3 C. Get annual recurrent training in the make and model. Okay, so this is required anyway, but the fact is this is key to most insurance carrier's willingness to offer their broadest coverage and most competitive rates. Underwriters typically recognize the value of any given training for only a twelve month period, which equals a policy period, so that training completed two or more years ago does not impact the underwriting as favorably as recurrent training in the make and model within the last twelve months. In short, training does affect coverage availability and premium. D. Develop and implement a security plan. There are numerous resources with sample security plans available. Example: AIG Aviation, Inc.’s Security Plan. E. Develop and implement an accident response plan. Again there are valuable resources available to help you with this process. Example: USAIG’s Corporate Aircraft Accident Response Plan is an excellent template to use in getting started. 37 AVIATION INSURANCE Page 3 of 3 F. Details. Quantify all the things you do that make your operation superior. Standard Operating Procedures, training to supplement the manufacturer’s programs, personal minimums, documented Safety and Security programs, etc. Complete all applications and forms timely, completely and truthfully. Even though there are few line-item credits in aviation insurance, you should provide Blais Aviation Insurance Services (your broker) with as much “ammunition” as possible about your aircraft and flight operations. This will help your account stand out from the sea of submissions most underwriters have on their desks every day. G. Review and evaluate your coverage regularly and thoroughly. Perhaps the value of the airplane has dropped in recent years but the insured value has not been properly adjusted. Operations change constantly so maybe there is coverage you didn't need last year that you should have this year. Consult with Blais Aviation Insurance Services (your broker) regularly, that’s why we’re here! 38 AVIATION INSURANCE What’s the deal with single-pilot operations? Single-pilot operations are possible; however,underwriters are less willing to extend high liability limits, offer preferred rates and will flat out require two-pilot operations in some circumstances. The industry is also attempting to address the upcoming proliferation of “microjets” that will open up high-performance, flightlevel operations to many owner-pilots. 39 AVIATION INSURANCE Should we carry war insurance or TRIA insurance or both? The subject of war insurance and the expanded terrorism coverage available under the Terrorism Risk Insurance Act (TRIA) of 2002 can be confusing. Please visit with Blais Aviation Insurance Services and ask for more information about War coverage and read our article about the Terrorism Risk Insurance Act of 2002. 40 AVIATION INSURANCE Who may use our airplane? Page 1 of 2 This question is often addressed in the context of cost reimbursement. That is, how much can be charged for the use of the airplane before running afoul of the insurance policy and/or the FARs. The short answer is, you can’t charge anything for the use of the airplane and “charge” doesn’t just mean cash payments. Aircraft insurance policies are designed for “your” use. The “your” is the Named Insured. Therefore the Named Insured can use the airplane for its pleasure and business. For example, ABC Company owns the airplane and utilizes it to transport ABC employees to conventions, move parts between plants, send ABC executives to meetings or bring ABC clients to visit company headquarters. 41 AVIATION INSURANCE Page 2 of 2 Problems arise when XYZ Company, whose jet is down for maintenance, wants to be able to use the ABC Company plane for supplemental lift. Or when ABC Company’s CEO has a buddy who wants to use the plane for a trip to the Bahamas. Or ABC Company makes widgets and the CEO is John Smith. John Smith owns an airplane under John Smith, LLC and he utilizes the airplane both for his family travel and also allows ABC Company personnel to utilize it, as needed. These alternative uses should be orchestrated with the help of an aviation attorney, your tax advisor and your broker so the insurance company can properly address any cost reimbursement that may fall outside the policy parameters. 42 AVIATION INSURANCE Can pilots be sued? Absolutely. For example, in the aftermath of an accident, the policyholder is sued for negligence as the owner of the aircraft. Meanwhile, a lawsuit naming the pilot personally for negligence is also filed. The insurance carrier’s obligation is to defend and take care of the policyholder. If the pilot is an employee of the policyholder or has been specifically added as an additional insured, the insurance carrier will defend the additional lawsuit for the pilot. (Remember the liability limit is shared by all parties; it is not a per person or per lawsuit occurrence limit!) If the pilot is an independent contractor and has not been added to the policy as an insured, the pilot will have to defend that lawsuit “solo.” Remember, it is possible to be an approved pilot but not necessarily a covered pilot. The fact that you are an approved pilot, whether by name in the policy or by meeting the policy’s open pilot warranty, simply means that if there is a loss while you are at the controls, coverage will still be in place for the policyholder. 43 AVIATION INSURANCE How is a pilot who is injured (or worse) compensated after an accident? It depends. If the pilot is an employee of the policyholder, workers compensation coverage should apply. Independent contractor pilots should still have their own workers compensation coverage, in theory. Absent workers compensation, perhaps there is major medical or life insurance to fall back on. Workers compensation laws usually bar employees from suing their employers. If however the pilot is not an employee, he or she could potentially sue the policyholder just like any other passenger! This is a big reason why underwriters prefer the regular use of employee pilots. 44 AVIATION INSURANCE What is a Broker of Record Letter (or Agent of Record Letter) and what does it do? Page 1 of 3 Insurance companies rely on insurance brokers to bring account submissions to them for evaluation. There are only a few aviation insurance companies, each with limited staff, and they do not want to tie up their underwriters by quoting the same risk to several different brokers. Therefore, each will recognize only one broker on any given risk on a firstcome, first-serve basis. The first broker who presents a submission to an aviation insurance underwriter is the official "broker (or agent) of record." The insurance carrier assumes this person was your first choice since they contacted them first. The choice of broker belongs entirely to the customer, so the broker can be later changed if that is the wish of the customer. Enter the Broker of Record Letter. It is a serious document that accomplishes the following: 45 AVIATION INSURANCE Page 2 of 3 A. Terminates the relationship between you and the current broker and suspends the current broker's ability to negotiate on your behalf with the insurance company. B. Affirms the appointment of a new broker, giving that broker the sole ability to negotiate with the insurance company for you, and grants access to any underwriting information or proposals that are currently "on the table." (Without a significant change in the basic underwriting information, if the insurance company has already made a firm commitment to the first broker to either decline or provide a quote, the new broker usually "inherits" that decision – whether it be a declination or a specific premium proposal.) C. Provides a relief mechanism, expressed in terms of a specified number of days "waiting period," to allow full disclosure of the letter to all parties involved, thereby granting the former broker the opportunity to review the implications of the letter with you and to confirm your desire to change brokers. 46 AVIATION INSURANCE Page 3 of 3 Be certain you understand the ramifications of this document. Have your broker explain its intent to you before you sign it! You are best served by selecting, up front, one competent aviation insurance broker who has access to all the markets and will consult with you on the resulting proposals. 47 AVIATION INSURANCE How can I get the lowest available rate on my insurance? Page 1 of 5 This is one of the most common questions in our business. Everyone wants the best coverage at the lowest rate, so we would like to share with you the following tips that may help you lower your premium at your next renewal. 48 AVIATION INSURANCE How can I get the lowest available rate on my insurance? Page 2 of 5 Annual Training Annual recurrent training is usually required for higher limits of liability, pressurized aircraft or turbine-powered aircraft. Some insurance underwriters even offer lower rates or better coverage for pilots who take annual recurrent training. Ideally, this consists of a manufacturer-recommended program that includes ground and flight training. For single-engine and light twin-engine aircraft, an annual Flight Review and Instrument Proficiency Check in the aircraft are usually acceptable if the flight instructor meets the policy’s Open Pilot Warranty. This is usually the best choice when manufacturer-recommended programs are not available and they can be coupled with the FAA WINGS or SEAWINGS program, which is highly recommended as well. Also, underwriters often require an annual FAA medical exam for pilots over 65 years of age. 49 AVIATION INSURANCE How can I get the lowest available rate on my insurance? Page 3 of 5 Association Memberships Some aviation ownership clubs and advocacy groups, such as the AOPA and EAA, have special insurance programs that can provide a discount for their members. Blais Aviation Insurance Services has access to these programs, so you can continue to do business with the agent you trust knowing that you don’t have to change agents to get the best price. We can apply for these discounts on your behalf, so make sure your membership is current and that we are aware of your membership numbers for associations like these. 50 AVIATION INSURANCE How can I get the lowest available rate on my insurance? Page 4 of 5 Pilot Ratings and Experience Most underwriters agree that experience is the best teacher. One of the biggest challenges in aviation insurance is finding affordable coverage for pilots transitioning into more advanced aircraft. NTSB accident reports have shown the underwriters which groups of pilots are the most at-risk, and they structure their rates accordingly. For that reason, rates are higher for pilots with fewer than 1000 total logged hours or those with fewer than 50 hours logged in the model of aircraft they will be insuring. An IFR rating is highly recommended and often required for aircraft that have a "glass cockpit" avionics, retractable landing gear or more than four seats. Also, be sure you have logged at least 25 flight hours in the last 12 months, or you may be required to get additional recurrent training. When transitioning to a more advanced aircraft, understand that the first year of insurance may be more expensive, but if you commit to an aggressive training and time-building program your renewal rate could drop substantially. 51 AVIATION INSURANCE How can I get the lowest available rate on my insurance? Page 5 of 5 Commercial Aircraft Commercial and corporate aviation faces a different challenge. Corporate turbine pilots usually already have either a Commercial or ATP certificate and the appropriate ratings. Your choice of training facilities can affect your premium and your overall cost of ownership. Well-known, fullmotion simulator training centers like Flight Safety International, SimCom and CAE Simuflite are accepted by virtually all the underwriting companies. There are also lower-cost, in-aircraft training options with which we are well acquainted, but not all underwriting companies accept every inaircraft training program. Because training and insurance go hand-in-hand, we can help you compare the total cost involved so you can make the an informed decision about your insurance and training options. Lowering your total cost of ownership is one of the ways Blais Aviation Insurance Services makes corporate aviation more efficient and profitable. 52 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 1 of 9 We often get questions from our insured's regarding the Open Pilot Warranty (sometimes referred to as Open Pilot Clause) on their quote or policy. The Open Pilot Warranty (OPW) in your aircraft policy lets you know who is allowed to fly your aircraft in addition to the named pilots. The hours and ratings listed under the Open Pilot Warranty do not reflect any of the named pilots. It simply states, if any pilot who meets or exceeds the following requirements, and is flying the aircraft with your (the named insured's) permission, and within the scope of the policy, then you have coverage. That individual pilot may not have coverage, and in many cases should have a non-owned policy to cover his individual liability, but your liability is still protected. 53 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 2 of 9 A typical Open Pilot Warranty on a fixed gear, 180 horse power, aircraft might read: Any Pilot, holding an FAA Private Pilot or more advanced certificate, having a minimum of 300 Total Logged Flying Hours, including 10 hours in the insured make and model aircraft. 54 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 3 of 9 This basically says that if a pilot has at least a private pilot certificate with 300 hours total logged time, including 10 hours in that particular model of aircraft, (i.e. Cessna 172, PA-28-180) than the named insured is covered while that pilot is using the aircraft within the scope of the policy and with the insured's permission. 55 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 4 of 9 The OPW for a complex aircraft may require commercial, and instrument ratings, with a higher number of hours. Multi-Engine aircraft will usually require a multi-engine rating for their OPW, and some aircraft may require a type rating, and make and model ground and flight school. Many larger aircraft will require make and model school in the last 12 months. As you can see, the OPW will greatly vary for different aircraft. Some policies with various aircraft and situations may have a Named Pilot Only requirement, stating that you are only covered if the pilot is named to your policy. 56 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 5 of 9 What if someone who is going to be flying your aircraft does not meet the requirements of the OPW? You will have to submit their pilot information to your company to see if they will qualify to be added as a named pilot. The "Catch-22" of this situation is that the companies do not like to add too many pilots to the policy. Many prefer to keep it at four pilots for an aircraft. 57 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 6 of 9 The rule-of-thumb for any aircraft policy is that you usually want to name the pilots who will be flying your aircraft on a regular basis. If it were a very occasional use, then perhaps they would meet the OPW requirements. At the same time, be sure that you are not adding more pilots than your company would feel comfortable with. 58 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 7 of 9 A very important point to remember is that even though a pilot may meet the requirements of your OPW, a Pleasure and Business policy does not allow you to make a charge for the use your aircraft. If there is a loss and it is discovered that the pilot was giving some sort of fee or remuneration for using your aircraft, coverage could be in jeopardy. If you are ever in doubt, call Blais Aviation Insurance Services for verification of what your policy will cover. 59 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 8 of 9 Some insurers issue broadening endorsements on their policies for preferred insured, which allow for a suspension of the Open Pilot Requirements to allow any pilot in the employ of an FAA Certified Repair Station to operate the aircraft in conjunction with repairs or maintenance. The Key here is FAA Certified Repair Station. If your shop were not an FAA Certified Repair Station then this provision would not apply. 60 AVIATION INSURANCE Who Can Pilot My Aircraft? Pilot Requirements and the Open Pilot Warranty Page 9 of 9 To summarize, always make sure that any pilot, who may fly your aircraft is either named to the policy, or meets the requirements of the Open Pilot Warranty. Also, make sure that they are using the aircraft in accordance with your policy's terms. If they do not, there is a good chance coverage could be in jeopardy. 61 AVIATION INSURANCE WHO ARE THE AVIATION MARKETS THAT BLAIS AVIATION INSURANCE REPRESENT? ACE USA (Formerly CIGNA) AIG Aviation Inc. Phoenix Aviation Managers London Aviation Underwriters Inc. United States Aircraft Insurance Group Inc. (USAIG) Aerospace Insurance Managers The Travelers Insurance Group W. Brown & Associates Inc. US Specialty Insurance Co. (Formerly HCC Aviation) Global Aerospace C.V. Starr & Co., Inc. 62 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. Aerospace Insurance Managers Dallas, TX aerospaceim.com 63 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. American International Group (AIG) Atlanta, GA/Dallas, TX aigaviation.com 64 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. Global Aerospace (AAU) Kansas City, MO/Dallas, TX global-aero.com 65 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. London Aviation Underwriters Seattle, WA londonaviation.net 66 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. National Hangar Insurance Program/ The Travelers Insurance Group Tulsa, OK coveragefirst.com 67 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. Phoenix Aviation Managers Atlanta, GA/Dallas, TX phoenixaviationmgrs.com 68 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. United States Aircraft Insurance Group (USAIG) New York, NY/St. Louis, MO usau.com 69 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. U.S. Specialty Insurance Company Dallas, TX ussicaviation.com 70 AVIATION INSURANCE AVIATION MARKETS Blais Aviation Insurance Services is proud to represent all the following major insurance markets. Our long term contracts and personal relationships enable us to secure the best coverage for your premium dollar. W. Brown & Associates Newport Beach, CA/Memphis, TN wbais.com 71 AVIATION INSURANCE Glossary Aviation Insurance / Aircraft Insurance Additional Insured - a person or persons other Aircraft Liability Insurance - protects insureds than the original named insured, who are protected under the terms of a policy. 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. 72 AVIATION INSURANCE Glossary Aviation Insurance / Aircraft Insurance Guest Voluntary Settlement - also known as admitted liability, Hull Insurance - coverage for physical damage done to the 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. aircraft. It is not liability coverage and is therefore triggered by a covered event, regardless of the reason for the damage or loss. 73 AVIATION INSURANCE Glossary Aviation Insurance / Aircraft Insurance 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. surgical, hospital and funeral expenses up to the applicable limit, regardless of the liability of the insured. Medical Payments - coverage that pays medical, 74 AVIATION INSURANCE Glossary Aviation Insurance / Aircraft Insurance 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. 75 AVIATION INSURANCE Glossary Aviation Insurance / Aircraft Insurance 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. 76 AVIATION INSURANCE Glossary Aviation Insurance / Aircraft Insurance Sub-Limit - usually a combined single limit of coverage that Subrogation - a doctrine that gives an insurance company 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. the right to attempt to recoup some or all of the money they have paid on behalf of the insured. 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. 77 AVIATION FACTS Number of U.S. Airports ¹ (As of December 31) Total Airports.............................… Public Use Airports.................… # with Paved Runways....… # with Unpaved Runways.… # with Lighted Runways....… # with Unlighted Runways… Private Use Airports...............… # with Paved Runways.....… # with Unpaved Runways… # with Lighted Runways...… # with Unlighted Runways.. Public use airports abandoned… Private use airports abandoned. Certificated Airports*...............… 2005 19,854 5,270 3,942 1,328 4,045 1,225 14,584 4,836 9,748 1,346 13,238 14 115 575 2004 19,820 5,288 3,941 1,347 4,037 1,251 14,532 4,771 9,761 1,301 13,231 10 117 599 2003 19,581 5,286 3,938 1,348 4,026 1,260 14,295r 4,678 9,617 1,223 13,072 19 214 628 ¹ Includes civil and joint-use civil-military airports, heliports, STOLports, and seaplane bases in the U.S. and its territories. * Certificated airports serve Air Carrier Operations with aircraft seating more than 9 passengers seats. (FAR Part 139). r revised Source: AAS-330 As of: 03/15/06 78 AVIATION FACTS THE TEXAS SYSTEM OF AIRPORTS Commercial Service Airport Red Stars General Aviation Airport Blue Dots 79 AVIATION FACTS ACTIVE CERTIFICATED PILOTS 2005 TOTAL Pilot Certificates Student Private Commercial ATP Other * 609,737 87,213 245,020 132,551 144,535 29,686 % 100% 14% 40% 22% 24% 5% WOMEN 37,243 9,857 15,036 7,421 4,908 21 % 100% 26% 40% 20% 13% 0% •Includes helicopter (only). Glider (only) and recreational pilots Source: FAA Administrator’s Fact Book (November 2005) 80 AVIATION FACTS ACTIVE CERTIFICATED PILOTS 2005 TOTAL Non – Pilot Certificates ** Mechanic Repairmen Ground Instructor Flight Engineer Other *** 515,293 317,111 39,231 73,735 59,736 25,840 % 100% 62% 8% 14% 12% 5% WOMEN 18,666 5,932 2,039 5,500 2,007 3,188 % 100% 32% 11% 29% 11% 17% ** Excludes non pilots 70 years old or older in all certificate types except flight engineers and flight navigators *** Includes flight navigators, parachute riggers and dispatchers Source: FAA Administrator’s Fact Book (November 2005) 81 AVIATION FACTS ACTIVE CIVIL AIRCRAFT 2005 TOTAL Total Aircraft Piston Turboprop Turbojet Rotorcraft Other 239,162 166,064 10,681 17,985 9,556 27,150 % 100% 69% 4% 8% 4% 11% % 100% Source FAA Administrator’s Fact Book (November 2005) FAA Aerospace Forecasts Fiscal years 2005-2016 82 AVIATION FACTS ACTIVE CIVIL AIRCRAFT 2005 TOTAL GA Aircraft Piston, Single Engine Piston, Multi-Engine Turboprop Turbojet Rotorcraft Experimental Other 219,780 144,530 17,480 8,030 8,628 7,595 22,300 6,027 % 100% 66% 8% 4% 4% 3% 10% 3% % 92% Source FAA Administrator’s Fact Book (November 2005) FAA Aerospace Forecasts Fiscal years 2005-2016 83 AVIATION FACTS ACTIVE CIVIL AIRCRAFT 2005 TOTAL Air Carrier Aircraft Piston Turboprop Turbojet Rotorcraft 19,382 4,269 3,281 9,235 2,571 % 100% 22% 17% 48% 13% % 8% Source FAA Administrator’s Fact Book (November 2005) FAA Aerospace Forecasts Fiscal years 2005-2016 84 AVIATION FACTS US AIRPORTS 2003/2004 TOTAL % 100% 70% 27% 0% Aircraft Landing Facilities Airports Heliports STOL ports 19,842 13,817 5,436 88 Seaplane bases Publicly Owned Privately Owned Public Use Private Use Airline Served (2003) Regionally Served (2004) 501 5,130 14,715 5,288 14,532 633 748 19,842 13,726 5,045 802 269 127 10 117 3% 26% 74% 27% 73% 3% 4% 100% 69% 25% 4% 1% 100% 8% 92% Longest Runway Less than 3,000 Ft. Between 3,000 ft. and 5,999 ft. Between 6,000 ft. and 9,999 ft. 10,000 ft. or more Landing Facilities Abandoned Public Use Private Use Source: FAA – Regional Airline Associates Notes: * Certificated airports serve Air Carrier Operations with aircraft seating more than 30 passengers (FAR Part 139 ** total airports receiving scheduled service (as per RAA) 85 AVIATION FACTS TEN BUSIEST AIRPORTS (FY) 2005 TOTAL OPERATIONS AIRPORT Atlanta Int’l Chicago O’Hare Int’l 984,390 980,372 11030 25,312 GA OPERATIONS Dallas Fort worth Int’l Los Angeles International Las Vegas/McCarran Int’l Washington Dulles Denver International Phoenix Sky Harbor Int’l Houston Bush Intercont’l Minneapolis St. Paul Int’l Source: FAA 739,517 653,534 605,493 588,712 566,036 559,887 552,353 543,784 8,520 14,297 67,612 75,118 9,592 40,945 17,124 32,304 86 AVIATION FACTS AVIATION ABBREVIATIONS The following abbreviations are found in aviation insurance applications, policies, aircraft advertisements, manuals and pilot operating handbooks. Insurance abbreviations Page 1 of 11 AMES – Aircraft multi engine, sea ASES – Aircraft single engine, sea ATP – Airline Transport Pilot BFR – Biannual flight review C – Commercial license CFI – Certified flight instructor CFII – Certified flight instructor, instrument Conv - Conventional landing gear with tail wheel Dual – training given by a qualified instructor 87 AVIATION FACTS AVIATION ABBREVIATIONS The following abbreviations are found in aviation insurance applications, policies, aircraft advertisements, manuals and pilot operating handbooks. Insurance abbreviations Page 2 of 11 Fixed – non-retractable landing gear Fixed tri – Fixed tri-cycle landing gear FR – Flight review G & F – ground and flight GNIM – ground not in motion GNIF – Ground not in flight G & T – Ground and taxi Heli – helicopter or rotor wing Hr - Hours 88 AVIATION FACTS AVIATION ABBREVIATIONS The following abbreviations are found in aviation insurance applications, policies, aircraft advertisements, manuals and pilot operating handbooks. Insurance abbreviations Page 3 of 11 I – Instrument rated IFR – Instrument rated ICC – Instrument competency check IPC – Instrument proficiency check M – multi engine Med – medical payments Med pay – medical payments ME – Multi engine MEL – Multi engine land MEI – Multi engine instructor MM – Make and model M & M – Make and model 89 AVIATION FACTS AVIATION ABBREVIATIONS The following abbreviations are found in aviation insurance applications, policies, aircraft advertisements, manuals and pilot operating handbooks. Insurance abbreviations Page 4 of 11 OPW – Open pilot warranty P – Private license Pax - Passengers PIC - Pilot in command RG – Retractable gear Rotor – Helicopter or rotorcraft RW – Rotor wing SE – Single engine SEL – Single engine land SES – Single engine sea SIC – Second in command Solo – no passengers or flight instructor in aircraft 90 AVIATION FACTS AVIATION ABBREVIATIONS The following abbreviations are found in aviation insurance applications, policies, aircraft advertisements, manuals and pilot operating handbooks. Insurance abbreviations Page 5 of 11 TO – Take off TO & L – Take off and landings TRI – Tri-gear TW – Tailwheel TT – Total time TTL – Total time logged 91 AVIATION FACTS AIRCRAFT ABBREVIATION Page 6 OF 11 0SFRM - zero time since a factory remanufacture 0SMOH - Zero time since major engine overhaul FWF - Firewall forward MDH - major damage history NDH - No damage history 92 AVIATION FACTS AIRCRAFT ABBREVIATION Page 7 OF 11 SCMOH - Since chrome cylinder major overhaul SFRM - Since factory remanufacture SMOH - Since major engine overhaul SOH - since engine overhaul (not necessarily a major) SPOH - Since prop overhaul STOH - Since top overhaul (pistons, cylinders and valve train) 93 AVIATION FACTS AIRCRAFT ABBREVIATION Page 8 of 11 TBO - Time between overhauls (factory recommendations) TT - Total time TTA - Total time on the airframe TTAE - Total time on the airframe and engine TTE - Total time on the engine TTSN - Total time since new 94 AVIATION FACTS AIRCRAFT PERFORMANCE AND SPECIFICATION ABBREVIATIONS Page 9 of 11 Amp - Amperage of the alternator (electrical system rating) Alt - Alternator AOC - Angle of climb C/S - Constant speed (governed speed, adjustable pitch) propeller Cu. In. - Cubic inches displacement of engines Fixed tri gear - non retractable tricycle landing gear with a nose wheel F/P - Fixed pitch (non adjustable) propeller FPM - Feet per minute (usually regarding climb) 95 AVIATION FACTS AIRCRAFT PERFORMANCE AND SPECIFICATION ABBREVIATIONS Page 10 of 11 Gen - Generator GPH - Gallons per hour MPH - Miles per hour HP - Horsepower of engine KTS - Knots (1 knot = 1.151 statue miles per hour, or 1852 kilometers per hour) L/R - Long-range fuel NM - Nautical mile = approximately 6,080 ft. Oct. - Octane rating of fuel. 96 AVIATION FACTS AIRCRAFT PERFORMANCE AND SPECIFICATION ABBREVIATIONS Page 11 of 11 PSI - Pounds per square inch (tire and strut pressure) Ret. tri gear - Retractable tricycle landing gear with a nose wheel ROC - Rate of climb SM - Statue mile = 5,280 ft. Sq. Ft. - Square feet regarding wing area. STD - Standard fuel V – Volts Vis - Viscosity of oil 97 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES PROVIDES COVERAGE FOR Page 1 of 9 Pleasure and Business Aircraft Commercial Aircraft Non-Owned Liability (included Non-Owned Aircraft Liability Damage) Airport Liability Fixed Base Operator Hangar Coverage Flight School Warbirds 98 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES PROVIDES COVERAGE FOR Page 2 of 9 Experimental and Home-built Aircraft Charter Flying Clubs Sales Demo Industrial Aid Helicopters Transition Pilots Banner Towing Instruction - Rental Sightseeing *All Aviation Insurance Needs 99 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 3 of 9 Blais Aviation Insurance Services is considered one of the world’s leading general aviation insurance brokers. We provide top quality insurance for all areas of the general aviation sector. We can meet the varying insurance needs of all types of general aviation operations, from private pilots and corporate jet operators, to fixed based operators and owners and operators of maintenance facilities and airfields. 100 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 4 of 9 Our objective is to provide the very best service combined with good value to our clients. This begins with the first request for a quote and is maintained across every facet of our relationship, from simple policy amendments to renewals and claims handling. 101 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 5 of 9 Blais Aviation Insurance Services is equipped to handle all types of loss from propeller strikes to major incidents, from hangar keepers' liability claims to third party property damage claims. Our experienced specialist underwriting team will provide advice and tailor the policy to cater for each individual policyholder's requirements. Together with our other forms of support we are able to offer a level of service unsurpassed anywhere in the aviation insurance market. 102 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 6 of 9 We cover every sector of general aviation including: Corporate aircraft Helicopters Charter and business aircraft Managed and fractional aircraft Airports and heliports Aircraft financial institutions Component manufacturers 103 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 7 of 9 Blais Aviation Insurance Services provides automated underwriting service for single-engine and specialty (kit) recreational and non-commercial aircraft across the US. On-line quotes are be available to select brokers and agents via the Internet. We offer substantial limits for physical damage, third party and passenger liability coverage within our product range which includes: hull all risks, hull war, liabilities to passengers and third parties, cargo liability, aviation products liability, airports, hangar keepers, premises, spares and also loss of use insurance. 104 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 8 of 9 The light aircraft insurance solution Blais Aviation Insurance Services operates a centralized dedicated office in Dallas, Texas to meet the insurance needs of pleasure and business aircraft across the US. The Pleasure and Business Aircraft Operations Unit (PBO) takes pride in its customer friendly service, which is based on the following simple objectives: To simplify placement of your pleasure and business accounts To deliver a product targeted at the buyer’s needs at a competitive price To provide same day quotes and policies with automated systems. 105 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Page 9 of 9 The light aircraft insurance solution The unit underwrites light aircraft of all types including: Pleasure & business aircraft: owner-operated piston engine powered airplanes used for pleasure (recreation) and private business (non-commercial) purposes. Specialty aircraft: including (kit) aircraft produced by Van’s, Zenith/Zenair, Murphy, Skystar and Europa aircraft. 106 AVIATION INSURANCE Blais Aviation Insurance Services Corporate Aircraft Pilot: Philip Blais 107 AVIATION INSURANCE Blais Aviation Insurance Services Corporate Aircraft Pilot: Philip Blais 108 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES Blais Aviation Insurance Services Corporate Aircraft Pilot: Philip Blais 109 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 110 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 111 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 112 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 113 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 114 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 115 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 116 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 117 AVIATION INSURANCE BLAIS AVIATION INSURANCE SERVICES 118 BLAIS AVIATION INSURANCE SERVICES A leading expert in the design, placement and service of aviation related insurance products. TOP 3 VALUES DELIVERED BY BLAIS   Technical expertise on coverage, limits, and industry trends. Service through out policy term including but not limited to claims support, client coverage updates and timely information pertaining to Aviation Insurance. Senior level market relationships that enable Blais to quickly deliver the most comprehensive and competitive programs available in the market.  119 BLAIS AVIATION INSURANCE SERVICES WHO WE ARE Blais Aviation Insurance Services operates as a wholesale and retail facility throughout the United States and specializes in aviation insurance. Blais Aviation Insurance Services provides expert services for all general aviation and specialty aircraft insurance requirements. Our staff of professionals has broad experience in aviation insurance that is supported by market relationships and resources to provide the best insurance programs for our clients. Blais Aviation Insurance Services is a wholly owned subsidiary of Blais Group and operates as dba of Blais Excess & Surplus Agency of Texas, Ltd. 120 BLAIS AVIATION INSURANCE SERVICES General Aviation Our general aviation department provides a wide variety of fixed wing and rotor wing aircraft insurance products as detailed below. Corporate Aviation / Industrial Aid Aircraft owned / operated by companies maintaining an aircraft or fleet of aircraft flown by professional flight crews. Coverages can include but not be limited to hull, liability, War & Confiscation, expanded territories, and extensive coverage enhancements. Pleasure and Business aircraft Aircraft ranging in size from small single engine to executive jet aircraft flown by the owner/operator Charter Service Aircraft operating under the guidelines of the FAR 135 certificate that would include passenger and cargo for hire. Other uses that would fall under this area would include but not be limited to power line/pipeline patrol, aerial photography, aerial advertising, predator control, fish spotting, and fire patrol. Aircraft sales Aircraft companies specializing in the sale of new and used aircraft Helicopters This would include both piston and turbine rotor wing for example R-22 and R-44. Blais Aviation Insurance Services can provide coverage for a wide spectrum of uses for helicopters which include but not be limited to industrial aid uses, pleasure and business, commercial use including charter, instruction, sightseeing, movie filming, Electronic news gathering (ENG), traffic patrol, fire patrol, control burning, animal herding, predator control and frost patrol. 121 BLAIS AVIATION INSURANCE SERVICES Airport Liability Blais Aviation Insurance Services can provide a wide range of Airport coverages from individuals who own or lease hanger space to entire airports. Blais Aviation Insurance Services also arranges extensive coverage for Fixed Based Operations including; Repair and Service, Parts (not installed), Sale of New and Used Aircraft, Sale of Fuel & Oil, Contractual, Independent Contractors and Premises Medical. 122 BLAIS AVIATION INSURANCE SERVICES Special Risk There area a number of unique class of aircraft with special risk requirements. Our specialty underwriters offer a wealth of experience to assist our producers in all of their specialty aircraft needs. Warbirds This would include military surplus aircraft both prop driven and jet aircraft, both domestic and foreign, for example, PT17 basic trainers, P-51 Mustangs and B24s. Homebuilts Experimental aircraft that are derived from kits or plans. These could range from a Vans RV-4 to a Glastar. Antiques / Classics Antiques are aircraft built between the years of 1903 – 1954. Classic aircraft include aircraft built from 1955 - 1960. Seaplanes This would include amphibious aircraft and aircraft fitted with straight floats. Ferry flights Delivery of aircraft internationally or domestically. Transition Pilots Provides coverage for pilots who are transitioning from one type aircraft to another. Non-standard risks This would include contracts where special uses and special aircraft are required such as Air Racing, Air Show performers and Aerobatic competitions. 123 BLAIS AVIATION INSURANCE SERVICES A leading facility in the design, placement and service of aviation related insurance products. CONTACT PHILIP BLAIS 972 818-4090 PHIL@BLAISEXCESS.COM 124 BLAIS AVIATION INSURANCE SERVICES 125