Insurance questions - COPA Group Aviation Insurance program

Recently the members of COPA Flight 75, St Thomas, Ontario sent some insurance questions to COPA’s insurers, Marsh Insurance, for clarification and then discussion at one of their Flight meetings.

The answers were interesting and we thought they were worth printing for everyone to read.

Here is what Flight 75 asked and what Marsh Insurance had to say in response:

The current edition of COPA’s Silver and Gold Wing Plans has a revised definition of "Private Business and Pleasure" which excludes certain activities from coverage. A number of questions have been asked by COPA and its members seeking clarification on this revised definition. Those questions and answers are as follows:

Question 1: "Instruction" is excluded from the definition of “Private Business and Pleasure” except for a "freelance” instructor. We assume an instructor provided by a Flight School is not excluded when you use your own plane?

Answer 1: Instruction is not a totally excluded use in the Silver Wings policy, but coverage under the policy is only provided if the instruction is provided by a freelance flying instructor.  Only the freelance flying instructor's liability to third parties is insured under the policy. Any liability of the freelance flying instructor towards the Insured and the pilot under instruction and any liability of the Insured and the pilot under instruction towards the freelance flying instructor is not insured under the policy.

If a flight school is providing the instruction whether on the Insured's own aircraft or not, the insurer places the onus on the flight school to obtain non-owned aircraft liability insurance to insure against all third-party liability claims including for injury to or death of pilots under instruction and damage to property including the aircraft being used for instruction. This liability is definitely the flight school’s, and any properly constructed flight school insurance program addresses these issues.

If the instructor is from a Flying School but is providing the instruction on his own (not on behalf of the Flying School) on the insured's aircraft then he would be considered as a freelance instructor. On the other hand, if the instructor is providing the instruction on behalf of the Flying School (the Flying School is receiving payment) on the insured's aircraft, then coverage is not provided by the policy.

Under the Gold Wings policy form, ab initio instruction is the only form of instruction which is not permitted. However, if an insured requires ab initio instruction coverage on his own aircraft, he/she can apply for a special quotation from the insurer to extend the policy.

Question 2: “Hunting" is excluded from the definition of “Private Business and Pleasure” and understandably so, but we assume this does not apply to flying into a hunting camp or on floats onto a lake to engage in hunting activities.

Answer 2: The policy is not intended to cover uses such as aerial predator or pest control (such as coyotes, deer, elk, moose or wolves) as low-level flying is a prerequisite for successful operations. It would also exclude using the aircraft to herd the animals for the benefit of ground-based hunters. Use of the aircraft for transportation to or from fishing or hunting camps is what the Silver and Gold Wings policies intend to insure.

Question 3: “Patrol" is excluded from the definition of “Private Business and Pleasure.” What is "patrol"? Some pilots have assisted emergency personnel in trying to locate lost persons or property. Pilots have been asked by authorities to locate or report growth plots of Marijuana. Are we covered if we engage in these activities?

Answer 3: Patrol as an excluded use is aimed primarily at low-level pipeline or power line patrol operations, but even high-level pipeline or power line patrol operations are hazardous as the route is determined by the pipeline or power line, not by the flying conditions.

If a pilot in the course of normal flight operations spots an illegal growth operation and reports its location to the proper authorities, this would not be considered a patrol. If the pilot went out specifically to search for illegal operations, one would be entering a grey area as to the operation of the policy exclusion. This is not something, however, that the insurer of the Silver and Gold Wings policies intends to cover and prudence dictates that this should be considered an excluded activity.

Question 4: “Competitive flying " is excluded from the definition of “Private Business and Pleasure.” Would this apply to simple air rallies or only to serious competitions?

Answer 4: Taken literally, any form of flying involving competition of any kind is excluded.  The obvious targets are events such as air races or other flying competitions such as major international air rallies offering substantial cash awards to the competitors. In the case of events such as air rallies or poker runs which are more social than competitive events, the flying is no different than that done when one is out for a flight on a summer afternoon and would be covered under the COPA Silver & Gold Wings policies.

Question 5: "Formation flying" is excluded from the definition of “Private Business and Pleasure.” Would this apply to "missing man" formation flights conducted by a club for local Remembrance Day services?

Answer 5: When the exclusion was originally drafted, "missing man" formation flights were the province of the military and not a target of the exclusion. The exclusion was intended to apply to air show competitors, be they amateur or professional.

The Silver and Gold Wings policies do not insure "missing man" formation flying on occasions such as Remembrance Day.

Question 6: On formation flying and "missing man" flights, several members indicated that their insurers point to CAR 602.24 quoted below. In their opinion "formation flying "is permitted under CARs and therefore is covered. Would you comment please?

"Formation Flight"

"602.24 No person shall operate an aircraft in formation with other aircraft except by pre-arrangement between

(a)        the pilots-in-command of the aircraft; or

(b)        where the flight is conducted within a control zone, the pilots-in-command and the appropriate air traffic control unit."

Answer 6: Although Formation Flying is permitted by CARs it is excluded, as stated in the definition of Private Business and Pleasure, in the policy wording. Because a certain usage is permitted by CARs does not make it incumbent upon an insurer to provide coverage for that particular usage.

The COPA Silver and Gold Wings Plans allow for limited coverage for formation flying. However, the policies exclude coverage in respect of the following:

(i) formation flying for the purposes of preparing for or participation in any aerial display or exposition;

(ii)        formation flying involving any aerobatic maneuver; or

(iii) any flying in connection with any flying exhibition or air show (except flying for the sole purpose of providing transportation to and from a flying exhibition or air show).

The following Questions and Answers as to the COPA Group Aviation Insurance Program are also addressed.

Question 7: Can you provide an overall breakdown of the types of claims that COPA sees in the Canadian market and advise us as to what steps pilots should take to avoid these claims?

Answer 7: Statistical information with respect to the overall Canadian aviation market is not available. However, with respect to the COPA Group Aviation Insurance Program, there were 214 claims over the last three years. The claims consisted of incidents occurring:

During Landing 49

During Take-Off 21

In-Flight 38

Whilst Taxing    5

From Wind/Hail/Snowstorms whilst aircraft were not hangared  44

From Vandalism/Theft/Miscellaneous Ground Losses 46

As you will observe, the highest percentage of losses, 23%, occurred during the landing phase. The majority of these were the result of a hard landing, loss of control, glassy water landings, gear collapse or forgetting to put the gear down.

Vandalism/theft/miscellaneous ground losses accounted for 22% of total claims. Vandalism to the aircraft and theft of electronic gear were the most common occurrences.

Wind/hail and snowstorms accounted for 20% of total claims. Aircraft were either not tied down properly or suffered damage simply because they were not protected from the elements i.e. damage could have been avoided if the aircraft was hangared.

In-flight losses accounted for 18% of the incidents. Aircraft either encountered a mechanical failure and crashed or weather was a factor.

Incidents during take-off accounted for 10% of all losses. These were primarily as a result of mechanical failure or loss of control.

Question 8: The COPA Group Aviation Insurance Program requires that the pilot must be a paid up member of COPA at the time of an accident, yet other insurance available in the market does not require membership. How enforceable is this provision?

Answer 8:       Important notice: this insurance is only available to COPA members. There is no coverage, if you are not a paid-up member of COPA or if at the time of loss you are not a resident of Canada having a place of principal residence in Canada

The "Important Notice" above appears in the Wings 2005 Edition Brochure, on each and every insurance Application as well as on the front of the Silver and Gold Wings policy wordings to emphasize the requirement to comply. The Silver Wings and Gold Wings Plans under the COPA Group Aviation Insurance Program are for the benefit of COPA members only. Aviation insurance provided by alternate markets does not have this requirement as these insurances are not designed specifically for COPA and its membership. Claims under the COPA Program have been denied if the "Important Notice" conditions have not been met, i.e. the insured must be a paid-up member of COPA and a resident of Canada having a place of principal residence in Canada at the time of loss.

Question 9: Another concern is, "is there continued coverage for landing at uncontrolled airstrips like farmers grass runways or like the Woodstock Ontario Flying Club grass runways. I fly a Piper PA11 (tail dragger) and do this a lot. They ask for your specific flying areas which in my case is mostly southern Ontario. However, I do make the occasional flight to Manitoulin Island and Sudbury. This is out of my stated region of activity. Am I still covered?”

Answer 9: There is no exclusion referring to farmers' grass runways or turf runways at aerodromes in the Silver or Gold Wings policy wordings.  Unless it is specifically excluded, coverage is included.

Any flying (unless otherwise excluded) within the policy territorial limits as stated in the Policy Schedule is permitted i.e.

“This Policy applies only to claims arising from occurrences which take place during the Policy Period shown on the Policy Schedule, and only to claims arising from occurrences in Canada, Continental United States of America, Alaska, the French Islands of St. Pierre and Miquelon, the Republic of Mexico or the Bahama Islands, or while en route between these places.”

Question 10: Does the COPA Group Aviation Insurance Program offer a reduced premium if the owner is willing to accept a higher deductible ($5,000-$15,000)?

Answer 10: An insured can request a higher hull deductible and such a request would be submitted to the Underwriter for a decision/quotation. It has been our experience that the premium savings does not make it an economically viable proposition for an insured to take a higher deductible.

Question 11: Would there be a financial advantage if several of our members were to apply for Gold Wings coverage as a group (approximately10 planes)?

Answer 11: The Silver Wings Plan and the Gold Wings Plan are part of the COPA Group Aviation Insurance Program hence the rates/premiums predicated take into consideration that this is a Group Program. Therefore there would not be any further savings by a group of 10 Gold Wings insureds applying as such.

This document provides only an outline of the policy coverage for the specific questions addressed. Certain policy exclusions and limitations may apply in any given fact situation and limit or exclude the amount payable under the policy.

Full terms and conditions of the insurance, including all exclusions and limitations, are described in the policy document, a copy of which can be obtained from Marsh and/or is available for review at www.copanational.org.