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Types of insurance we offer for Maintenance, Repair, & Overhaul shops
MRO shops can range from on-airport repair and service shops to off-airport completion centers for airplane parts that are later installed on a manufactured aircraft, such as a nut or bolt.
The majority of the premium that MROs are charged is Products Liability for the repair and service of aircraft maintenance. The premium that is charge is based on the liability limit, annual sales, a description of how critical the maintenance operations are and loss ratio.
General aggregate is the total amount of liability the insurance company will pay for a policy period. People will refer to this coverage as slip and fall or premises liability. An example would be $10,000,000 per occurrence/aggregate.
What do underwriters need to know about quoting Maintenance, Repair, & Overhaul shops?
There needs to be detailed description of the products manufactured or maintained. If the maintenance company is working on engines they need to know whether it’s turbine engines or reciprocating engines. Maintenance and manufacturing of engines is considered a critical flight operations and gets higher rates than non-critical such as sheet metal, nuts or bolts.
Below is a list of most to least critical:
- Flaps or wing surfaces, landing gear
- Sheet metal, nuts, and bolts
Sales Receipts for current year and estimated annual sales
The insurance company will need to know what the MROs sales are for each category.
Estimated Sales next 12 months:
- Repair & Service – $1,000,000
- Parts Sold But Not Installed – $500,000
- Avionics Repairs & Service – $500,000
- Sale of Fuel & Lubricants – $5,000,000
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages for the loss of use of completed aircraft occurring after delivery to and acceptance for flight operations by a purchaser or purchasers or operator or operators of such aircraft, and caused by a grounding following an occurrence arising out of the Products Hazard.
Hangarkeeper’s Property Damage Liability
Pays those sums that the Insured becomes legally obligated to pay as damages because of direct loss or damage, including loss of use, to an “aircraft,” and parts of “aircraft,” which are someone else’s property and which are in the care, custody or control of the Insured, as bailee, for storage, repair, servicing or safekeeping (as evidenced by the Insured’s records) but only while the “aircraft” is not “in flight” and while the “aircraft” is situated at the airport premises shown in Item 4. of the Declarations. The “aircraft” or its parts may also be temporarily elsewhere, but must be under the Insured’s physical control for the purpose of service or repair.
The limits of our liability for aviation workers compensation insurance:
- $1,000,000 Bodily Injury by Accident $ each accident
- $1,000,000 Bodily Injury by Disease $ policy limit
- $1,000,000 Bodily Injury by Disease $ each employee
Aircraft Hull & Liability
Many MROs also own and operate aircraft of their own for charter, industrial aid (pro pilot), or pleasure and business operations. The coverage for aircraft insurance is Aircraft Hull & Liability.