If you are a current aviation insurance policyholder or have been around aviation insurance, you have likely heard the term ‘waiver of subrogation’ (WOS). A waiver is a vehicle, when granted to an individual, airport, insured entity, hangar lessor, training provider, etc., whereby the insurance carrier involved in a claim/loss gives up its right to subrogate a loss back to the waiver recipient. While it is not very common for a pilot individually or a training organization to beto be subrogated against, it’s always best practice to receive a waiver when you are engaged in commercial activity as one of the noted parties.
If you are hangaring your aircraft at its base of operation with an FBO or standalone hangar owner/lessor – you will most likely be asked to execute a hangaring agreement. The same holds true for a training contract if you are engaging a training provider to administer initial or recurrent training in a turbine aircraft. These noted agreements will almost always require the signing party receiving the service to list the hangaring entity or trainer on the aircraft insurance policy as an additional insured and provide a waiver of subrogation. The waiver (when in place) prohibits the insurance carrier (underwriter) from subrogating a loss even in times of negligence by the party causing the loss. In today’s insurance market, it is somewhat common for the insurer to charge the policyholder a premium when offering a waiver of subrogation, specifically in hangaring agreements. The reason for this charge, at least in the case of hangaring entities, is that the insurer is now shouldered with responsibility for covering the loss even when its insured party (aircraft owner) has no culpability in the loss occurring (think a damaged aircraft caused by the FBO but no one admitted fault). Typically, premium-bearing waivers are only related to hangaring and not training providers – but all policies can be different, so it’s best to have your broker explain any premium-bearing items specific to your policy when a formal agreement might be tendered for you to sign as the aircraft owner. All agreements you, as the aircraft owner, execute should be reviewed by your broker and underwriting carrier to confirm compliance with the insurance policy and that any noted insuring agreements you agree to are duly executed within the policy.
The details here definitely matter, especially if there is a loss that occurs in a hangaring arrangement and each party starts pointing fingers at each other.