I hope this tread is not too redundant but I worry in todays litigant society that an unfortunate accident could wipe out a person's net worth or estate. We all read accident reports to learn from but I have never seen the results of lawsuits generated from these "negligent"GA accidents in Aopa. Pilots say don't fly with anyone you don't trust. etc. The million dollar liability policy is not going to satisfy many attorneys and I was told setting up a trust will not stop them. Any comments from our insurance experts would be appreciated...Garv

I'm not an insurance expert by any means. I also don't have as many assets as Bill Gates, but what I have is dear and sorta necessary.

Only flying "with people you trust" won't get you anywhere, cause those aren't the folks who will sue you--their heirs will. And, by the way, your money doesn't necessarily have to be the target. Take a look at the John Denver fiasco. He bought a homebuilt airplane. It said "Experimental" all over it. He didn't get a checkout in it, he didn't fuel it, in fact all he did was fly it out over the ocean all by himself and run it out of gas on one tank. In the process of switching tanks (and of course he wasn't familiar with that drill) he crashes and kills himself. Now, this guy left a LOT of money to his heirs. Nonetheless, they sued the builder of the airplane, who DID NOT have a huge amount of money, probably to teach him a lesson. Like don't sell homebuilt airplanes to rich guys.

Cory Lidle's heirs and his flight instructor's (note that neither of them apparently had received training in the Cirrus) heirs are now suing Cirrus, Continental, and probably Goodyear for killing their loved ones.

You cannot totally protect yourself from this sort of thing. Get the best insurance policy you can find, don't be stupid, and hope for the best.

Your other alternative, if this is going to make you totally nuts worrying about it is to quit flying. Of course, you probably want to quit driving cars, boats, consuming alcoholic beverages in the privacy of your home, because you might do something fatal to the burglar who breaks in at 2 Am and tries to kill you.

You can let this stuff control your life, or you can simply get the best insurance policy you can get and get on with life.

If you have a fair amount of money to start with, retain a great lawyer as soon as anything happens that's even vaguely suspicious.

Life is just too short to lose sleep over this kind of stuff, or to let it control what you do. You're better off to give the money away, and live life if that's the case.

I can provide my address to mail the check if you're considering this option .

MTV

Sidenote:

I'm staying in the building that Cory Lidtle crashed into next month.

People do dumb things and sue all the time. Not my fault I'm a dim-wit they say, it's your fault for not stopping me from..X...Y.....Z.

Case in point, or a few I've worked on anyway...um....

A Turbo Piper Aztec has its exhuast pipes welded at a small town muffer shop and the ring holding on for the exhuast stack replaced with one off a truck. The stack falls off inflight and the tire in the wheel well lights up, burning a wing off. The family sues honeywell and piper for....something like 25 million each.

A guy take off in Idaho with his family on a grass runway, he has a new STOL kit on his Cessna so he pulls up hard low and slow, even though he could have used a low angle down river. He stalls it, wings over into some trees and cuts a wing off, then drops on to a river bank. There is a post crash fire that burns the already dead and the injured other five people in the plane. He fell out into a deep pool of water, in the river, as the door was ripped off. He sues Cessna for not making the plane crash worthy, even though he cut off a 7 inch dia tree with the wing.

And.....well I've got lots more.

If you need an expert.......to find out the truth of the matter....

Look at: Exponent.com

mtv wrote:
Cory Lidle's heirs and his flight instructor's (note that neither of them apparently had received training in the Cirrus) heirs are now suing Cirrus, Continental, and probably Goodyear for killing their loved ones.

You cannot totally protect yourself from this sort of thing. Get the best insurance policy you can find, don't be stupid, and hope for the best.

MTV

The key to any liability suit is to prove that some form of negligence was the proximate, or contributory cause of the accident which links the defendant to the legal liability of the claim. For example: If I was negligent in replacing your NAV light which caused it to not work properly and you had an accident due to gear failure I should not be found liable. The damage was caused by the gear which is the proximate cause, not my negligence with the NAV light. Had the NAV light somehow contributed to the gear failure then I might be found liable due to contributory negligence, but that is obviously harder to prove. Negligence is defined simply as a failure to act or do what a reasonable or prudent person would do in the same scenario and/or acting or doing something that a reasonable or prudent person would not do in the same scenario.

In the case of Cory Lidle, IF there was a negligent party, it would be the pilot and the instructor, but a lawyer will always include anyone remotely linked to the claim in order to get the most out of the suit. In all actuality the suit will probably be settled outside of court for far less than the suit is demanding simply because it is cheaper to settle than to pay the court fees to prove your innocent. From the lawyers / claimants point of view, a lot of little settlements add up to one big paycheck.

As MTV stated, you cannot totally protect yourself from every lawsuit since in the US we can sue anyone for anything...frivolous lawsuits have become the norm. The best thing that you can do is purchase the best insurance available to cover your exposure. Keep in mind that on most aviation insurance policies the defense cost are covered in addition to the liability coverage, not taken out of that limit. You are defended whether or not you were the guilty / negligent party. Many times the lawyers will find out the limit of your insurance policy and agree to settle out of court for that amount which limits the legal fees and can be very attractive to the insurance company...enter the Cory Lidle case.

On a side note...umbrella policies are a great insurance tool to help cover losses that may exceed the primary insurance coverage. Be sure that your umbrella does not exclude aviation risk...many umbrella policies will specifically do so. This goes for your life insurance as well and a lot of recreational pilots never think to check into this point. You would hate to void your families life insurance in the event of your death simply because you were operating an aircraft and never read your policy.

-Low

Lowflyby's advice is good, and that is the way our judicial system is SUPPOSED to work, and in most cases it does.

That said, understand that these things, if they go to court, are decided by juries for the most part. I guarantee you that there is not necessarily ANY logic to the conclusions that SOME juries come to in a court of law.

Nevertheless, this all applies to everthing we do in life. If you drive a car, guess what? Same thing could happen.

As to the Lidle deal, that gent COULD have earned a LOT of money over the span of his (cut short) career. The family will likely try to recoup as much of that income as they can.

As noted, they may settle. Then again, they may take it to court, and if they get the right jury, somebody will bleed.

The suit against Piper several years ago was a prime example of a whacko jury decision. No logic whatever, all emotion.

MTV

mtv wrote:

As to the Lidle deal, that gent COULD have earned a LOT of money over the span of his (cut short) career. The family will likely try to recoup as much of that income as they can.

Aaaahhh, precisely the point I was talking about in my previous post. The lawsuit in this case is largely motivated by the fact that his contract and life insurance policy specifically excluded any aviation related risk in which he was operating an aircraft. If it is determined that Cory was operating the aircraft at the time of the accident...you guessed it, the contract and the life insurance is only worth the price of the paper it is written on. Hard to argue that he was not operating the aircraft when it belonged to him and he was showing his buddy the sights. Guess which way the contract holder and life insurance company will judge that one.

mtv wrote:

As noted, they may settle. Then again, they may take it to court, and if they get the right jury, somebody will bleed.

The suit against Piper several years ago was a prime example of a whacko jury decision. No logic whatever, all emotion.

MTV

Very true...much of that emotion stems from the fact that the general (non aviation minded) public views aviation as a very dangerous activity. In the opinion of many, those who participate in or contribute to such a dangerous activity should be held strictly liable for any consequences. Often it is viewed no differently than a demolition crew that uses dynamite. The jury does not care that all possible steps were taken to prevent an accident, they just care that there was an accident and those who participated should pay, regardless of how the law defines liability and negligence.

This is another reason why insurance companies and / or aviation related companies will often try to settle the claim out of court. If they take the risk of going in front of a jury there is no telling what the outcome will be and the judgement could easily be more then the cost to settle.

-Low

Garv:

This one is a difficult one indeed. I have attempted to do as much as possible for insulation, but who knows if it ever is enough or will actually work. I had a friend a number of years ago that was killed in his 206 along with his wife. His son was very badly hurt. An exhaust valve failed, the engine quit completely and they crashed in some bad mountains. NTSB Final Report. Because I stepped in to really try to help his son and because at one time in life I was an attorney, I got to see a lot of the litigation pretty close. Everyone, and I mean everyone, sued everyone else: airplane manufacturer, mechanics, parts manufacturers, engine manufacturers, insurers, etc. Now you would have thought given the very clear evidence of the failure and resulting crash that this would have been a pretty easy one. But with everyone pointing their finger at everyone else, it was long and ugly. In the end, the boy did get a settlement, but probably nothing like he should have.

Anyway, from what I have read, the first line of defense is insurance; as much as you can afford (although even here there are contrarians who would argue go naked and it won't be worth anyone's time going after you; might be true if you didn't have much in the way of assets, but probably not otherwise).

Because it is cheap and easy, I register my aircraft in a single-member LLC, that is fairly and adequately capitalized at all times. A single-member LLC doesn't have to have a Federal Tax ID or file a return. Any tax stuff you have can run straight to Schedule C on the 1040. Of course the problem here is that you will probably be the pilot in any accident, so it is you that will be sued along with everyone else.

Finally, you can try to have any passengers sign a hold harmless and release agreement. I posted one the the SuperCub.org website here, that was originally created by an acquaintaince who is a very paranoid helicopter pilot and his equally paranoid attorney (e.g. initialling every single paragraph). I looked at a lot of other agreements and finally came up with this one.

I have to admit, however, that I am generally embarrassed to ask prospective passengers to sign the darned thing. Further, although it covers a lot of bases, I am unaware of any situation where something like this has been used and tested in a real court case. Obviously, it couldn't hurt, but I don't know if this, or anything else, is bulletproof.

Now for the DISCLAIMER (the things you have to do in a litigious society): I am not currently an attorney (I have even less respect since I went into real estate development). The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, there may be omissions or inaccuracies in the information provided. Accordingly, the information is provided with the understanding that the author is not herein engaged in rendering legal, accounting, tax or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. Caveat emptor.

Other than that, have a nice day.

375HandH

lowflybye wrote:On a side note...umbrella policies are a great insurance tool to help cover losses that may exceed the primary insurance coverage. Be sure that your umbrella does not exclude aviation risk...many umbrella policies will specifically do so.

Do you know of any umbrella policies that do not exclude aviation? I've looked and could not find one.

Prepared

375handh wrote:Finally, you can try to have any passengers sign a hold harmless and release agreement.

That is a good idea in the event that the passenger survives and should want to file suit, but you cannot waive the rights of another party(surviving spouse, etc.) and they are usually the ones that you have to worry about. If you should die in the crash, then it is your estate or loved ones that will have to worry about the lawsuits.

Prepared Pilot wrote:

lowflybye wrote:On a side note...umbrella policies are a great insurance tool to help cover losses that may exceed the primary insurance coverage. Be sure that your umbrella does not exclude aviation risk...many umbrella policies will specifically do so.

Do you know of any umbrella policies that do not exclude aviation? I've looked and could not find one.

Prepared

I do not deal with the umbrella policies as I am strictly aviation so I would hate to give you any false info as to who, and how much is possible. I will check with one of the agents in our private client group when I get in tomorrow and see if I cannot get some info for you to that effect. I would guess companies like Chubb, Firemans Fund, or Lloyds of London would do it, but again I will check with those that know in the morning and get back to you on it.

-Low

***UPDATE***

I have checked with our personal lines agents as well as our private client agents and to their knowledge an umbrella policy that does not exclude aviation does not exist. There is only one exception that they know of and that is through the AIG Private Client group. They will (on occasion) write an umbrella policy that includes aviation for their very affluent clients. By affluent client I mean those with homes exceeding $1.5 million and having a very high personal net worth. The client must also be in good standings within the Private Client group of AIG and have a premium of greater than $25,000 per year to even be considered for the coverage. Even if you meet those minimum criteria there is a myriad of other factors that they take into account before they will consider it.

Needless to say, I will not be carrying an aviation friendly umbrella policy for many years to come...if ever.

lowflybye wrote:***UPDATE***...a premium of greater than $25,000 per year to even be considered for the coverage...
Needless to say, I will not be carrying an aviation friendly umbrella policy for many years to come...if ever.

Thanks for checking but I don't see it in my future either.

Just received a flyer from AVEMCO stating that they are now affiliated with an underwriter (at least I think that's what they said) that will provide life insurance that's good even if you were operating an aircraft when you got dead.

I'm not an insurance guy, but you may want to give AVEMCO a call.

MTV

Pilot friendly life insurance is not the hard one to find as there are quite a few companies out there that will write it, but there are a lot of companies who exclude it as well and that is what you must be leary of. We have a handful of them that we deal with for life insurance that are pilot friendly. The umbrella policy that does not exclude aviation risk is the "mission impossible" coverage.