Non-Owned Aircraft Liability Insurance for Pilots and Businesses
Flying, hiring or using an aircraft you do not own can create a gap between the aircraft owner’s policy and your own legal liability. Non-owned aircraft liability insurance is designed for specified exposures arising from the use of aircraft owned by someone else.
It is not automatically a substitute for the owner’s hull and liability policy, and it should not be assumed to cover physical damage to the borrowed aircraft unless that protection is expressly included.
Discuss your current cover and business activities through ABS’s aircraft non-ownership liability service.
Speak with an aviation insurance specialist
Discuss the aircraft, operation, pilots and insurance questions with ABS at Bankstown Airport.
Request an aviation insurance review
Ask ABS to review the current policy or arrange cover for a new aviation exposure.
Non-owned aircraft liability: check the owner's policy
Non-owned aircraft liability insurance may protect an insured pilot or business against covered liability arising from operating an aircraft it does not own. Depending on the wording, separate protection may be available for damage to the non-owned aircraft.
Before flying, confirm the owner’s policy, approved-pilot requirements, permitted uses, deductibles, recovery rights and whether you are actually an insured party. CASA approvals and pilot privileges must also be satisfied independently of insurance.
Who May Have a Non-Owned Aircraft Exposure?
- pilots hiring aircraft from a club or flying school;
- businesses chartering or using aircraft without owning them;
- pilots borrowing an aircraft from another owner;
- instructors, ferry pilots or contract pilots;
- companies whose employees fly third-party aircraft; and
- aircraft management or operational arrangements involving separate entities.
The correct insured may be an individual, company or both. Tell the broker who enters the hire agreement, who operates the aircraft and whose activities could create liability.
Do not rely solely on being an approved pilot under the owner’s policy. Permission to fly and protection against every claim are different questions.
Questions to Ask About the Owner’s Policy
Request clear information about the aircraft policy and hire or use agreement. Check:
- whether you are named, included by definition or merely permitted to fly;
- pilot-hour, recency, licence, rating and training conditions;
- permitted private, business, training or commercial use;
- liability and passenger limits;
- the hull excess and who must pay it;
- subrogation or recovery rights following damage; and
- geographical, airport and operational restrictions.
Obtain legal advice if the agreement transfers broad liability to you. An insurance broker can review insurance implications but cannot determine the legal effect of the contract.
Match the Cover to the Actual Flying
Provide the aircraft types, estimated hours, pilot experience, purposes, locations and maximum aircraft value. If several aircraft are used, avoid describing only the most familiar or least valuable example.
CASA explains that commercial flying requires appropriate approvals, trained personnel and insurance. See its guidance on making sure a flight is legal. Insurance does not authorise an operation that is outside regulatory permissions.
Notify the broker before changing aircraft types, uses or operating arrangements.
Frequently Asked Questions About Non-Owned Aircraft Liability
Does the aircraft owner’s insurance automatically cover the pilot?
Not necessarily. The pilot may be permitted to fly but still face uninsured liabilities, excesses or recovery action. Check the policy and agreement.
Does non-owned liability pay for damage to the hired aircraft?
Only if the policy specifically provides applicable physical-damage or legal-liability protection. Do not assume liability cover includes the aircraft itself.
Is this cover only for individual pilots?
No. Businesses using or arranging non-owned aircraft can also have an exposure. The appropriate insured entities must be identified.
What information will an insurer request?
Pilot experience, licences, ratings, aircraft types, uses, locations, estimated hours, claims and the arrangements under which aircraft are used.
Can it replace the aircraft owner’s policy?
Generally no. It is designed around the non-owner’s exposure and normally complements rather than replaces the owner’s insurance.
Can ABS review a hire agreement and insurance?
ABS can review the insurance requirements and existing policies. Legal interpretation of the agreement should be obtained from a lawyer.
Do Not Assume Permission to Fly Means Complete Protection
Provide ABS with the aircraft-use agreement, pilot details and information about the owner’s insurance. We can help identify the non-owned liability questions that require an answer before the next flight.
Important information: This article provides general information only and does not consider your objectives, financial situation or needs. Aviation insurance is subject to policy terms, conditions, pilot requirements, limits and exclusions. Operational and regulatory requirements can change. Confirm current requirements with CASA or the ATSB where relevant and obtain advice appropriate to your circumstances.
