SPECIALTY LINES · 5 MIN READ

Aviation Insurance: Hull, Liability, and Pilot Warranties

Aviation insurance is underwritten around two assets: the aircraft and the pilot. Aircraft hull coverage is first-party physical damage on owned or long-term-leased aircraft, typically all-risk (the Lloyd's market standard is the AVN 1C wording) and classified by exposure state - in flight, taxiing, or not in motion. War and allied perils are excluded from the hull grant and written back through separate hull war endorsements (the AVN 52 series). AVN 1C also extends to aircraft spares - engines, avionics, rotables - but only while they are NOT installed in or on the aircraft: in storage, in transit, or being worked on. Once installed, a spare becomes part of the hull. The pilot warranty is a condition precedent to in-flight coverage and has two prongs: a list of named pilots (or an Open Pilot Warranty describing approved classes) AND qualification requirements - certificate type, ratings, medical, total hours, and time in make and model. Both prongs must be satisfied; a pilot who is named but lacks a required certificate or rating is not an approved pilot, and in-flight losses are excluded. Liability limits come in two architectures: a Combined Single Limit (CSL) including passengers applies one each-occurrence limit to all bodily injury and property damage, while split-limit forms carve passenger liability into per-seat and per-occurrence sublimits that can leave serious-injury gaps. Commercial operators generally prefer CSL. Operational liability products round out the market. Hangarkeepers liability covers an FBO's exposure for damage to non-owned customer aircraft in its care, custody, or control - available as Legal Liability (negligence required), Direct Excess (pays without fault, excess of the customer's hull), or Direct Primary (pays without fault on a primary basis). Aerial application (crop dusting) under FAA Part 137 needs specialty placement because generic aviation forms exclude chemical dispersal - chemical drift damaging neighboring crops is the signature exposure. Unmanned aircraft flown commercially under FAA Part 107 carry their own hull and liability sublimits, with underwriting attention to waivers for night operations, beyond-visual-line-of-sight flight, and overflight of people.