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Aviation Products Liability Insurance

Aviation products liability insurance is for aviation product manufacturers, maintenance companies or Maintenance Repair Overhaul (MRO), FAA Part 145 Repair Stations, airport owners and Fixed Based Operators (FBO) in relation to the manufacture, sale, and distribution of products; repairs and modification to aircraft; and to the performance of services relating to aircraft products.

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Coverage Highlights

Products liability insurance
Completed Operations insurance
Hangarkeepers Liability insurance
Aviation Commercial General Liability insurance
Airport Commercial General Liability insurance

What Our Clients Are Saying...

Specifically, aircraft products coverage includes:

Sale of new and used aircraft
Sale of aircraft parts and accessories
Sale of fuel and oil

Completed operations is defined as aircraft repairs and servicing, including installation of parts and accessories.

Aviation products liability insurance protects the insured for liability incurred as a result of injury to members of the public which may result from defective products or from completed operations. The coverage is designed to pay for occurrences caused by mistakes in the manufacture or preparation of products or the rendering of service work.

Aviation products liability insurance can either be written as a standalone policy specifically for products liability or it can be included in an Aviation Commercial General Liability insurance policy.

What’s covered by products liability insurance?

Products liability coverage contains three limits of liability:

Per person
Per accident
Aggregate policy limit

A major problem in the writing of products liability has been that of catastrophe losses. Think Boeing 737 Max loss in Ethiopia Airlines and Lion Air in Indonesia where the MCAS system malfunctioned. Not only is there manufacturing defects but the entire fleet of Boeing 737 Max aircraft were grounded.

A Commercial General Liability policy will include:

Premises Liability
Bodily Injury and Property Damage
Defense Settlement Costs and Supplementary Payments
Products and Completed Operations
Personal Injury & Advertising
Grounding Liability
Spare Parts Liability
Third Party Legal Liability

Types of Aviation businesses that require this coverage

The products liability coverage is applicable to those who manufacture or market aircraft products and components to be sold to others. The completed operations section is applicable primarily to firms engage in servicing, installation, and repair work, such as fixed based operations. Because of the catastrophe exposure, most markets sell this coverage only after careful inspection of all the insured’s operations.

Products liability for the aircraft and engine manufacturers as well as the thousands of component parts manufacturers is a specialized line of aviation insurance large volumes of it are written by only a few of the markets, most notably Global Aerospace, USAIG, AIG, and Lloyd’s of London.

Already have products liability insurance?

Chances are, if you’re in the aerospace industry as a Maintenance Shop, Aircraft Manufacturer, Parts Manufacturer, FBO, Fuel Provider, Paint Shop, or Avionics Company – you already have Products liability insurance.

Questions to ask your current aviation insurance broker:

What aviation insurance companies are currently offering Product liability insurance for the aviation industry?
How do the insurance companies rate the risk of a companies Products liability exposure?
Should I provide loss runs to new insurance companies so they can quote?
What limits of liability would be adequate to cover my business operations?
Is it possible to get the underwriters to come and visit our premises and see our operations?
Are there any new insurance companies offering Product Liability insurance?