Aircraft Liability Coverage Limits: What Every Owner Needs to Know

What Is Liability Coverage?

For those unfamiliar with the term, liability coverage refers to bodily injury  and/or property damage to a third party that you, as the owner/pilot, could be held responsible for due to your negligence, resulting in a third-party injury/death or damage to property.

How High Can Your Limits Go?

High liability limits are typically readily available on a professionally crewed turbine aircraft. In the case of two-crew-required business aircraft, you can obtain liability limits of $500M or higher in most cases, depending on the market you are insured with and the type of equipment (age of aircraft) operated. 

Even on single-pilot-operated light jets, when professionally flown, the current market routinely yields options of $25M-$50M in some cases.
The current market, however, does not support high limits for single-engine owner-flown turbine or piston aircraft in the same way. Owner-flown single-pilot limits are usually tapped out at $10m – in rare cases, some owner/pilots may qualify for a $25m limit in turbine aircraft, but those cases are pretty rare in today’s world. 

The piston market is a completely different animal and very tight in terms of limits – Single-engine (SEL) piston aircraft generally won’t see limits higher than $2M and $5M in some cases, but only for the most qualified pilots. 

Excess Liability: Filling the Gap

There do, however, exist ‘excess liability’ options in the piston and turbine marketplace for those who may not be able to achieve the desired liability protection. More qualified owners/pilots in pistons can typically access the  2M-5M limits. 

A good rule of thumb is to max out the primary liability limits available (on the aircraft insurance policy) before exploring excess liability options with your broker. The higher the primary limit obtained, the sharper the excess premium will be when layering excess liability on top of the primary to achieve the desired final limit. For instance, you may max out your Cirrus insurance at $2M on a primary policy and also be able to secure 2-3M in excess liability to layer on top, yielding $4M or $5M in total aircraft liability.

Don't Assume Your Umbrella Policy Has You Covered

One final thought on liability coverage in the market concerns‘umbrella’ policies. I often hear clients say, “I have a $50M umbrella policy to protect me, so I’m not worried about lower limits on my aircraft insurance policy.” More often than not, the umbrella policy you carry personally to cover your other insurance (homeowners, auto, etc.) will EXCLUDE aviation-related exposures. 

So you are best to confirm with your umbrella carrier first if the coverage applies to your aircraft or aviation exposures. I have seen very few umbrella policies encompass aviation risks in my 22+ years in the business – not to say some won’t, but most won’t cover aviation. 

If you’re seeking higher liability coverage, it’s prudent to engage your broker to explore excess liability options, which may be able to bring your limits to the desired coverage level via the ancillary product being available, depending on your specific risk.

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