Key Takeaways
- General liability insurance protects against lawsuits from passengers or third parties in case of accidents
- Excess liability or umbrella insurance provides additional protection above your primary insurance limits
- Workers’ compensation insurance covers medical expenses and lost wages if employees are injured on the job
Introduction
As a business operating in the nonscheduled chartered passenger air transportation industry, it is crucial to have the proper insurance coverages in place to protect your company from financial risks. The top three insurances to consider include general liability, excess liability or umbrella insurance, and workers’ compensation.
General Liability Insurance
General liability insurance provides protection for air charter businesses against costly lawsuits and claims that could severely damage a company financially. It covers legal expenses and damages in the event of incidents involving passengers or third parties.
Additional details on pricing, benefits and common use cases of general liability insurance for businesses in the nonscheduled chartered passenger air transportation industry (NAICS 481211) are provided in the reference. Average annual premiums tend to range between $30,000-$50,000 but can vary depending on factors like passenger capacity, flight frequency and claims history. Coverage of passenger injury claims, property damage and liability from negligence are among the key uses.
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Based on industry data and risk factors, the estimated average annual pricing for general liability insurance for businesses in the Nonscheduled Chartered Passenger Air Transportation industry (NAICS 481211) is around $30,000-$50,000. Factors that influence pricing include passenger capacity, aircraft type, safety record, number of flights, and prior claims history. Carriers with larger aircraft carrying more passengers and higher flight frequencies tend towards the higher end of the range.
Estimated Pricing: $30,000-$50,000
Excess Liability Insurance
Excess liability insurance, also known as umbrella insurance, provides additional layers of protection beyond a business’s standard primary general liability insurance coverage. Without excess limits in place, a single catastrophic incident involving significant injuries or damages could potentially threaten the long-term survival of the business due to claims exceeding their primary policy limits.
For businesses operating in the nonscheduled chartered passenger air transportation industry, excess liability insurance is especially important given the risks involved in passenger air transportation services. Accidents or incidents during passenger flights using aircraft like jets or turboprops could result in expensive lawsuits and multi-million dollar claims that primary insurance alone may not fully cover. Excess policies help limit financial exposure and protect business assets.
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Based on industry data and standard pricing models, the estimated average annual premium for $50M in excess liability insurance would be around $150,000. This was calculated using factors like aircraft type (typically jets or turboprops), number of flights, safety record, and insured limits. Higher or lower aircraft capacities, more/less flights, better/worse safety scores would impact pricing slightly.
Estimated Pricing: $150,000
Workers Compensation Insurance
Workers compensation insurance provides essential protections for businesses operating in the high-risk aviation industry. As the reference details, it covers medical expenses and lost wages for employees injured on the job, protects companies from costly lawsuits, and ensures staff will be supported financially if an accident occurs. It is also required by law in most states and helps reduce turnover from work-related injuries while giving owners peace of mind knowing their staff will be cared for.
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Workers compensation insurance pricing for this industry is generally estimated to be between $8 to $12 per $100 of payroll. This rate is derived based on the industry having a higher than average risk level due to the hazardous nature of operating aircraft. Specific rates may vary depending on a business’s claims history, safety practices/programs, and other individual company risk factors.
Estimated Pricing: $8-$12/100 of payroll
Conclusion
In summary, general liability, excess liability, and workers’ compensation insurance are essential for nonscheduled air charter companies. They protect your business assets, limit liability exposure, and ensure employees are cared for if incidents occur. Having robust insurance policies in place provides peace of mind and protects the long-term viability of your aviation company.