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Aviation Workers Compensation Insurance

Workers’ compensation laws impose liability upon the employer for on-the-job accidents without regard to the question of fault. It is a no-fault concept. Basically, every aviation company that has employees is required to carry workers’ compensation insurance per state laws.

Coverage Highlights

  • Workers compensation – obligates the insurance company to pay sums that the insured is legally obligate to pay under the workers compensation laws of the state(s) where the insured is conducting business.
  • Employer’s liability coverage – designed to cover the liability of the employer to workers with standard limits. We typically see $1,000,000 each accident for aviation workers compensation insurance.

What Our Clients Are Saying...

We commonly see workers’ compensation insurance for aviation businesses including:

What’s covered by aviation workers compensation insurance?

There are generally four types of benefits provided by workers’ compensation laws:

  1. Medical Expenses – In most states, medical expenses incurred by the injured worker are covered 100% and without limit. Covered expenses not only include doctor and hospital costs, but also any expense incurred at home that is medically necessary.

  2. Wage Replacement – Injured workers are provided a weekly income until they are able to return to work. The amount and duration on the income depends upon the workers’ average weekly wage, and classification of disability. The size of the weekly income is generally two-thirds of the workers’ average weekly wage up to a dollar maximum such as $1,000,000.

  3. Survivor compensation – Benefits may be paid to eligible survivors when a worker is killed as a result of a work-related accident.

  4. Rehabilitation – Physical therapy, vocational training, and psychological evaluations.

What kind of aviation businesses require coverage?

Not only aviation companies but all companies are required to carrier workers’ compensation insurance for their employees. In most states the insurance is purchased through a broker and insurance company but there are a handful of states that are considered “monopolistic” meaning the workers’ compensation insurance is purchased directly through the states insurance fund. These states are Ohio, Wyoming, Washington, and North Dakota.

Cost of Workers’ Compensation insurance?

The annual premium for workers’ compensation insurance is typically based upon a percentage of the employer’s payrolls. The percentage per $100 of payroll varies with the classification codes and prior year loss history. It is important to request the previous five years loss runs when quoting the renewal of a workers’ compensation policy. Doing so will create more underwriting interest and better rates.

What are common aviation classification codes?

  • 8810 (Clerical Worker)
  • 3805 (Aircraft Engine Manufacturer or Rebuilding)
  • 3826 (Aircraft Engine Manufacturer)
  • 3681 & 3682 (CA Instrument Manufacturer)
  • 3830 (Airplane Manufacturer)
  • 3831 (CA Machine Shops & Aircraft Components)
  • 5474 (Painting NOC & Shop Operations, Drivers)
  • 7402 (Aviation ¬‐ Air Traffic Controllers Under Contract with the FAA)
  • 7403 & 7423 (NCCI & TX Aviation All Other Employees & Drivers)
  • 7405 (Aviation Air Carrier Scheduled, Commuter)
  • 7421 (Aviation Transportation of Personnel in Conduct of..)
  • 7422 (Aviation NOC Other Than Helicopters Flying Crew)
  • 7424 (CA & NJ Aircraft Operation Member of Flying Crew NOC)
  • 7428 (CA & NJ Aircraft Ground Schools All Employees)
  • 7429 (CA Airport Operators All Employees Including Field)
  • 7431 (Aviation Air Charter or Air Taxi Flying Crew)

What are the work comp cost saving programs?

Dividends Programs – Starr Specialty and Old Republic Aerospace

Premium Discount – A discretionary discount based on the insurance companies rating factor

Experience Modification – A scheduled rating based on prior loss ratio experience. The NCCI’s website has an expected experience modification for each company with employees.

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