Excess liability for high-net worth folks?

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PatternPinion@reddit

Put the plane into a LLC, even if you are the sole owner. That will shield your personal assets from any incidents.

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This is a very common misconception. In any incident, the pilot will be personally sued. The LLC can protect the airplane if I was sued for something else (e.g. a slip and fall on my property), but there's no "here's one trick lawyers don't want you to know about" protection against aviation incidents offered by having your plane in an LLC.

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PatternPinion@reddit

By the time you get to this point, your name shouldn’t be on hardly anything directly. Everything should be in LLCs or trusts. The only thing in my name specifically is the kids car. And that’s a lease.

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skunimatrix@reddit

You don't need insurance you need to talk with a JD/CPA Estate attorney to set your estate up to be "judgement proof", which is something you need to be doing even if flying wasn't a factor given how litigious people are these days. I'm we're dealing with this after a recent car accident I was involved in on a country road with no stop signs.

It will involve moving assets into a network of Trusts, LLC's, LLC's owned by Trusts, etc. hence the need for a lawyer who is also a CPA because there are tax consequences (pitfalls) if not done correctly.

Yes it also means having to cross your t's when it comes to accounting as well. Got to make sure that you keep business/personal finances absolutely separate. Again where you will need the CPA services.

We're worth a few dollars but own nothing outside of a checking account with $10k in it and the cars. Our home: owned by a trust. Taxable brokerage: owned by a different trust. Farms: LLC owned by a trust. Airplane: LLC. Condo: LLC owned by a different trust.

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Esquire99@reddit

Make sure you understand what “fraudulent conveyance” means as you’re undertaking these strategies. The lawyers that structure them don’t really like to talk about it, of course, but those structures aren’t as bullet proof as people are sold.

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FatFirredNowWhat@reddit (OP)

Very true, and already in the process of doing exactly this.

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Dry-Horror-4188@reddit

I am in the insurance business and I too am a PPL, SEL, IR. Every standard insurance company is not going to cover aviation related issues. I have been doing the insurance gig since 1997, licensed PPL since 1982, so I think I have enough experience and knowledge in this.

What I did is I got a policy for $2,000,000 smooth. In the past I was able to find a Lloyds underwritten aviation umbrella policy, but for the extra $1,000,000 (I had $1M underlying at the time) ran $16000. Funny, I just sent a check into my insurance today for $1260.00 for the year (less than my 26 Tundra).

I would start with getting a $2M smooth policy and then you can search. It is going to be very expensive.

Also, fly in areas where if you do wipe out, you don't take other people with you.

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flyingron@reddit

Thanks for someone who acutally knows what they're talking about rather than just flapping their gums about what they imagine might be available.

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Small_Chicken1085@reddit

I’m poor.

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chronos18@reddit

This person just said Lloyd's has offered an aviation umbrella policy but that it was extremely expensive. That's the business they're in, they'll write pretty much any specialty policy as long as you're willing to pay. Have you checked with Lloyd's? Not sure why you're so upset by people trying to be helpful..

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FatFirredNowWhat@reddit (OP)

Thanks! My broker managed to get a quote for about $4K for a $2M umbrella on top of my $1M CSL. And I fly in Western PA, so if I go down, the most likely thing I'm going to hit is a hill :)

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flyingron@reddit

I have never found any umbrella or supplemental policy of any sort that will cover liability for GA incidents.

It's sad. It's why I don't do more (and certainly not instruct).

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otterbarks@reddit

No firsthand experience, but I've heard Chubb will do this kind of thing. (HNW clients are their specialty.) But you have to move *all* your policies over for them for them to work with you.

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FatFirredNowWhat@reddit (OP)

I already have all my policies with Chubb, but no joy there for aviation.

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flyingron@reddit

I've dealt with Chubb before. No soap there. They would cover the wine in my cellar, however.

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jtyson1991@reddit

How rich are you?

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flyingron@reddit

Well over the $1MM smooth that can find in aviation policies.

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jtyson1991@reddit

Is your concern that you're going to wipe out something out on the ground and survive, or that your passengers will be injured? Or what?

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flyingron@reddit

Yes, yes, and more.

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BeefyMcPissflaps@reddit

These should be concerns for everyone that flies, not just the higher NW people. The average pilot can wipe out a lifetime of savings with the right accident.

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clarkmueller@reddit

You won’t find it with a traditional liability policy. But you can ask an aviation insurance broker about an excess liability policy in addition to your owners policy. It’s very expensive, and I’m not sure if there are pilot experience requirements. My experience is that umbrella liability policies are around $100 per $1M of coverage. When I priced it out a few years ago, purchasing an aviation excess liability policy was > 10x that (and that’s only for aviation, works as secondary coverage to the primary owned aircraft policy, and required the primary policy to be at least $1M smooth).

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flyingron@reddit

Believe me, I have researched this. Everybody is happy to write you an umbrella policy, but every single one I've quoted when you get down to the coverage excludes aviation outside of the airlines.

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Infamous-Ad-140@reddit

Same with boats, nobody wants to cover boats over xyz length(typically 45ft) on umbrellas either

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clarkmueller@reddit

I agree with you that I’ve never seen an umbrella policy without an aviation exclusion, but I’m talking about a different insurance product entirely. “Excess liability” is basically an aircraft insurance policy without the hull coverage. It functions similar to an umbrella policy in that provides coverage above the liability limit of your aircraft owner policy, and it doesn’t kick in until you’ve exhausted your policy limits. But just like your aircraft insurance, it is specific to aviation perils (i.e. won’t cover anything to do with your house or car) and you would buy it from an aviation insurance broker. I was offered this by Aviation Marine (aviation-marine.com, now owned by somebody else) after a few years in my T210 (I had to ask for it). Nobody seems willing to write it for my Cirrus yet, because of lower time in type, but it’s out there.

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flyingron@reddit

I suspect nobody wants to write one of these because I'm flying a Navion. It's hard enough just to get a simple policy on those.

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PlasticDiscussion590@reddit

That’s not me, but that’s my normal client.

The comment about structuring your estate to be judgement resistant is important, I suspect you’ve done that to some extent.

As to your question, 2-3m smooth liability is about the highest you’re likely to get. I do know some people who have more but they’re the outliers. I have heard some underwriters are more willing to offer more liability when someone moved to a cirrus and attend a training event annually, but that may be a few isolated cases.

Only flying “family or a few close friends” is not a bad thing. It reduces some risk (friends will be happy to sue you if advantageous to them) but the think I like about that self imposed limitation is it prevents you from ever having the illegal charter talk with the FAA.

For my own personal flying, even as a professional pilot during the day, I wouldn’t take anyone flying who isn’t family or close friends. I have professional channels I can invite a stranger to fly through, but I’m not offering joyrides to people I don’t know well.

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FatFirredNowWhat@reddit (OP)

Yep. I did ask my broker. He was able to find a $2M umbrella for about $4K, which would sit on top of my $1M CSL policy. I plan on doing it. Thanks!

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flatulentpiglet@reddit

https://xopa.gia-usa.com/wings. This is (I think) a fairly new product for Cirrus pilots. Don’t know if it exists for others and I have no idea if it’s good.

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BeefyMcPissflaps@reddit

10m isn't HNW these days. Sad I know. That doesn't mean you shouldn't protect yourself. You can carry a larger liability policy for sure. I carry one personally to protect myself and the people I fly for have their own version (they're much higher NW than I am as you can imagine). The PC12 I fly has a 50m liability policy. The Falcon I fly has a 150m liability policy. There's underwriters that will do it for you personally for sure for premium bump. Mine wasn't too bad and it's good piece of mind when I'm flying for fun and not for work.

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Infamous-Ad-140@reddit

Anything is possible, you can buy as much limit as you can afford but you me going to need a broker. No direct writer offers excess liability on aviation

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soittfire88@reddit

They will write as much as you are willing to pay for but it can also change the minimum pilot requirements too

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old_flying_fart@reddit

"They will write as much as you are willing to pay for"

Nope.

Lots of personal owner-flown policies have caps that are significantly less than the NW of the owner.

Source: I don't make stuff up.

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soittfire88@reddit

It was an incorrect assumption based on my experience with an extremely large liability policy on a citation i currently fly which does exactly what i mentioned. My bad

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old_flying_fart@reddit

+1 for saying "Hey, I was wrong. Ooops."
It's a very good trait for a pilot to have.

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soittfire88@reddit

For a human to have* 🫡

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DeltaTule@reddit

Stop being insurance poor and live your life. If you die then you die. It’s that simple. Go fly your plane

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TSwiftIcedTea@reddit

Not at all familiar with aviation law but my first thought was are there ways to structure around an LLC to avoid liability?

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old_flying_fart@reddit

Not if you're the pilot. The pilot can always be found personally liable.

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V35TN-BO@reddit

You can still be sued individually as PIC if you’re found negligent so and LLC isn’t a magic bullet.

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Dry-Horror-4188@reddit

With the remarkable increase in Personal Injury Parasites (oops I mean attorneys) they have found ways to go through the corporate veils and protections that LLCs used to hold.

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Mispelled-This@reddit

LLCs can only protect an owner from actions of people other than that owner. They have never protected an owner from their own actions, because a plaintiff can simply sue that owner directly instead of suing the LLC.

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flyingron@reddit

There's not even a corporate veil to pierce. You can always be sued in your personal capacity.

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TSwiftIcedTea@reddit

What if you are operating as a required crew member under a 135?

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flyingron@reddit

You can't hide behind an LLC for your personal liability.

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BozoThePilot@reddit

If this remains unanswered by tomorrow I will ask the pilot I regularly instruct as he is a HNW individual with a very expensive twin turbine.

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SlowDownToGoDown@reddit

Not a HNW individual, but have you approached your insurance broker about coverage options?

-former bizjet driver where I believe we had $300MM smooth liability polices due to flying HNW individuals.

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flyingron@reddit

Yes, and it's not available at any price from the guys I've been dealing with at least.

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V35TN-BO@reddit

I’ve gone back and forth between whether I should fly friends. I’ve done it sparingly mostly because of the weight of guilt if something did happen and I were to survive.

The financial impact on the estate is not something I’ve fully considered. With the right lawyers on the plaintiff side, I’m not sure a $5m umbrella is adequate to protect your estate in the event you are found negligent as PIC.

Bare minimum would be ensuring you have the 182 in an LLC and you are maintaining that company properly.

I would talk with your lawyers first. They can at least run through different scenarios and be able to make a confident recommendation on how to approach both structure and insurance. This reminded me I need to do the same.

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otterbarks@reddit

An LLC wouldn't really help here, assuming you're a sole owner just using it as a privacy shield. It would be trivial for a good lawyer to "pierce the corporate veil" and attach the claim to your individual property.

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V35TN-BO@reddit

Yea I agree which is why I say bare minimum. NAL.

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Important_Repeat_806@reddit

You can get higher limits on a 182 but there will be a limit (usually 3-5mm) for SEP. As you progress higher limits become available. We cover our jets for 50mm and turbos for $20mm.

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chronos18@reddit

I would imagine one of the specialty insurers (e.g., Lloyds of London, Chubb) would write you a policy that covers this. Whether they'll do so at a price you're willing to pay is another question.

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Col-Sanderss@reddit

Hey, you likely worked your ass off to achieve that high worth, and if you inherited it, you're working your ass off to keep it. It's one thing not to flash it around, but don't feel the need to apologize and bow down to the "privliege" stuff.

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rFlyingTower@reddit

This is a copy of the original post body for posterity:

Hi,

First, I'll recognize this is fundamentally a first world problem of huge privliege.

For those of you with high net worths ($10M or more), do you look for excess liability insurance for GA flying? I'm a low time (250 hour) IR PPL and own a Cessna 182. My aviation policy tops out at $1M liability. I have a $5M umbrella policy but I know that won't cover aviation activities.

Right now, because of the risk, I pretty much only fly my family and a few close friends.

Have you found carriers that write excess liability policies for aviation activities?

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