Is our RAA public liability cover large enough?

[Old Koreelah]

If a member is blamed for a prang in which a person receives permanent injuries, the current $10m cover may be insufficient. I am aware of the argument that the higher our cover, the more a litigant is likely to claim, but I'd rather pay a few dollars more each year than risk bankruptcy due to insufficient insurance.

 

Has anyone researched recent payouts?

 

 

[Nobody]

If a member is blamed for a prang in which a person receives permanent injuries, the current $10m cover may be insufficient. I am aware of the argument that the higher our cover, the more a litigant is likely to claim, but I'd rather pay a few dollars more each year than risk bankruptcy due to insufficient insurance.Has anyone researched recent payouts?

OK, The $10m public liability is probably large enough but the $250k passenger limit is pretty low. Imagine taking a mate for a fly and the worst happens. $250k does not last very long...

 

If you approach a broker you should be able to get an "Umbrella Policy" that covers the ammoun of a claim in excess of the RAAus limits.

 

 

[Old Koreelah]

OK, The $10m public liability is probably large enough but the $250k passenger limit is pretty low. Imagine taking a mate for a fly and the worst happens. $250k does not last very long...If you approach a broker you should be able to get an "Umbrella Policy" that covers the ammoun of a claim in excess of the RAAus limits.

Tried that, when I finally got a broker to return my calls the extra cost was outrageous. Instead of individuals "topping up" our cover, it should be enormously more economical for our Association to do it.

 

 

[turboplanner]

I posted a recent payout for a quadriplegic injury in the Public Liability thread. I think it was about $16 to $18 million.

 

That was for one person and equates to the cost of supporting the person for life.

 

The reason top ups through different companies don't work is that the two companies would have to adjudicate who paid for what, 50/50 or one pays the first $5 million etc. but the real problem would be when one wants to settle out of Court.

 

My suggestion would be for RAA to negotiate an option deal with the supplier, so a member could opt to pay for an extra $10 mil (for examlple) cover.

 

 

[Happyflyer]

One thing you could do is to not give the insurance company any reason not to pay out. Things such as being medically fit, properly licenced, aircraft registered and servicings and paperwork up to date and not breaking any other basic rules at the time of the accident. It is interesting to see in the ATSB reports how many times the pilot's medical or BFR has lapsed, maintenance not current etc. Remember also the courts have deem flying to be inherently dangerous and are reluctant to order payouts to any person who should reasonably know this. I personally don't know of anyone who has ever been sent bankrupt by a genuine accident in an aircraft.

 

 

[DGL Fox]

OK, The $10m public liability is probably large enough but the $250k passenger limit is pretty low. Imagine taking a mate for a fly and the worst happens. $250k does not last very long...If you approach a broker you should be able to get an "Umbrella Policy" that covers the amount of a claim in excess of the RAAus limits.

I have just had this discussion with the insurers, yes your passenger is only covered for $250k but the key words are I think in the case of an accident ... if you are found that you have been negligent or proved that you were at fault in some way..I think that is the way he put it...then then your standard members insurance probably won't be enough. I think they should immediately raise this amount but I guess if they do so will our membership fees.

 

David

 

 

[coljones]

I have just had this discussion with the insurers, yes your passenger is only covered for $250k but the key words are I think in the case of an accident ... if you are found that you have been negligent or proved that you were at fault in some way..I think that is the way he put it...then then your standard members insurance probably won't be enough. I think they should immediately raise this amount but I guess if they do so will our membership fees.David

Oh have to balance off the likely maximum damages award and the likely hood that it will happen. It may be, given that flying in small planes is a "self evident risky endeavour", that the awards are very low and extremely infrequent and having a large amount of passenger insurance is not economically justified.

 

 

[Bruce Tuncks]

There is a notice in my plane which says "this aircraft is not required to meet the safety standards of regular aircraft. People fly in this aircraft at their own risk"

 

Now I guess that the entire legal profession dislike this because it threatens to exclude them from litigation profits. So we could expect a court to find it a non-legal agreement? But surely it would have to limit damages payouts.

 

 

[turboplanner]

There is a notice in my plane which says "this aircraft is not required to meet the safety standards of regular aircraft. People fly in this aircraft at their own risk"Now I guess that the entire legal profession dislike this because it threatens to exclude them from litigation profits. So we could expect a court to find it a non-legal agreement? But surely it would have to limit damages payouts.

It doesn't absolve you from negligence; since we all make mistakes, suitable insurance cover is the responsible action.

 

 

[Downunder]

If every facet of my life and my families was insured to the hilt, I'd be doing nothing but watching TV and making them rich. "You can never have too much insurance!"... Ha Ha

 

People need to sit down and take a good look at their assets, liabilities and risks to make pragmatic and useful decisions about "their own" required cover.

 

 

[turboplanner]

If every facet of my life and my families was insured to the hilt, I'd be doing nothing but watching TV and making them rich. "You can never have too much insurance!"... Ha HaPeople need to sit down and take a good look at their assets, liabilities and risks to make pragmatic and useful decisions about "their own" required cover.

We're not talking about every facet of our lives.

If you want to engage in a high risk activity, like flying aircraft which have been declared high risk, the only question you have to ask yourself is: "Do I have up to $20 million in the bank to pay for a claim by my passenger if I make him/her a quadriplegic?"

 

If the answer is: "Yes" then you probably wouldn't bother with insurance. If the answer is "No", then without it, you've got a chance of needing The Salvation Army one day.

 

 

[jetjr]

Just because there's an accident doesn't mean owner or pilot is negligent.

 

 

[turboplanner]

Just because there's an accident doesn't mean owner or pilot is negligent.

No, the plaintiff has to prove he was negligent, and that's not too hard after an injury or death.

 

 

[jetjr]

They either were and it can be proven or they weren't.

 

If someone is injured or not shouldn't make any difference other than how much they can spend on the case.

 

 

[Camel]

I'm almost sure that the RAA insurance policy says it pay $250K max for any claim and max for any single incident or accident ! So if you don't have your own insurance you need to read the policy carefully.

 

 

[Camel]

I'm almost sure that the RAA insurance policy says it pay $250K max for any claim and max for any single incident or accident ! So if you don't have your own insurance you need to read the policy carefully.

What is Funny ?

 

 

[Happyflyer]

I'm almost sure that the RAA insurance policy says it pay $250K max for any claim and max for any single incident or accident ! So if you don't have your own insurance you need to read the policy carefully.

From RAAus website. "The cover has an indemnity limit of up to $10,000,000 for liability arising from third party property damage or bodily injury including a sub-limit of up to $250,000 for liability arising from injuries to passengers (including student pilots). Depending on individual circumstances, you may require more than the limits described above, so you may need to maintain additional individual insurance."

 

 

[turboplanner]

From RAAus website. "The cover has an indemnity limit of up to $10,000,000 for liability arising from third party property damage or bodily injury including a sub-limit of up to $250,000 for liability arising from injuries to passengers (including student pilots). Depending on individual circumstances, you may require more than the limits described above, so you may need to maintain additional individual insurance."

That doesn't make a lot of sense.

I would say the person most likely to be injured by a duty of care failure would be your passenger, and the passenger is likely to sue you for up to $18 million based on recent cases for quadriplegics, you would think the policy should be covering that.

 

If the typical claim for a badly injured finger with nerve damage is about $40,000, the $250,00 might pay for someone who loses a leg.

 

So,

 

1. The actual wording of the policy is important to understand what exactly is being offered here.

 

2. As discussed earlier, that wording would need to be very specific about the boundaries of who was responsible for what, if you made the recommended top up.

 

It could be that after a detailed anaylsis, this RAA offer is not of much use at all, and it might be better to take out a $20 million or so policy yourself.

 

We're probably not going to get to the bottom of this on a forum where we don't have the actiual words, or the actual intent of this policy, or whether the RAA people involved in setting it up realised the problems of having two different insurers covering the same risk.

 

 

[Bruce Tuncks]

What about the notice I have to carry in full view of the passenger about how they travel in this aircraft at their own risk?

 

I guess you will say that this amounts to a deal which cuts the legal profession, including judges, off the gravy train and it will therefore be declared nonvalid.

 

 

[aro]

the passenger is likely to sue you for up to $18 million based on recent cases for quadriplegics

Lawyers are familiar with the concept of blood from a stone, so if the insurance only pays out 250K and you don't personally have 18 million, they are unlikely to sue you for 18 million. If you do have 18 million, you probably shouldn't be relying on the RAA insurance policy...

 

The real purpose of insurance is to convince the lawyers that they will be better off going after whatever the insurance will pay than you personally. 250K may or may not achieve that, based on personal circumstances.

 

You might recall the recent case where a woman was injured by a light fitting while having sex in a motel on a business trip, and sued her employer. Why sue her employer not the motel, who presumably had more responsibility for the light fitting? Odds are, the motel didn't have an insurance policy, or the employer had a much bigger limit...

 

 

[turboplanner]

What about the notice I have to carry in full view of the passenger about how they travel in this aircraft at their own risk?I guess you will say that this amounts to a deal which cuts the legal profession, including judges, off the gravy train and it will therefore be declared nonvalid.

We've covered this several times.The warning alerts the passenger to heightened risk but does not absolve you from negligence.

 

 

[coljones]

Lawyers are familiar with the concept of blood from a stone, so if the insurance only pays out 250K and you don't personally have 18 million, they are unlikely to sue you for 18 million. If you do have 18 million, you probably shouldn't be relying on the RAA insurance policy...The real purpose of insurance is to convince the lawyers that they will be better off going after whatever the insurance will pay than you personally. 250K may or may not achieve that, based on personal circumstances.

 

You might recall the recent case where a woman was injured by a light fitting while having sex in a motel on a business trip, and sued her employer. Why sue her employer not the motel, who presumably had more responsibility for the light fitting? Odds are, the motel didn't have an insurance policy, or the employer had a much bigger limit...

These days the employer will only pay expenses and usually chooses the accommodation or a restricted range of offerings. Given a choice, these workers may have chosen a better hotel that offered a safer environment or indeed spent the night at home with all those comforts - a cheap beer in the back fridge, a decent collection of DVDs, a decent meal, breakfast which didn't bloat. The employer set the scenario and forced a change in lifestyle, they should bear all or at least some of the load.