No matter how big or small your charter flight company is, it can all be swept away when a hurricane strikes. From a single aircraft operation to a sprawling commercial carrier, all businesses that carry passengers or goods in the air should protect themselves from a sudden weather event—including securing enough income replacement to survive a devastating storm. Attorney Bill Voss explores the many forms of hurricane insurance coverage for owners of planes, helicopters, airfields, and other commercial and private aircrafts.
Hurricane Insurance Considerations for Charter Flight Companies
A natural disaster can cause millions of dollars in commercial losses, and operators should examine their insurance policies carefully to determine what will (and will not) be covered in the event of a hurricane. It is a good idea to purchase coverage tailored specifically to the needs of your business; for example, a rental policy with a high enough limit to cover the loss of every rented aircraft at once.
That said, owners are more likely to collect adequate compensation if their policies include:
- All-risk hull damage. Hurricanes can damage planes in the air, on the ground, or even secured in a hangar. Property damage insurance for an aircraft, commonly called hull coverage, typically comes in three different forms: ground only, taxiing, and all-risk. While all-risk coverage is typically the most expensive option, it pays for property damage when the plane is not in motion, in motion on the ground, or in flight.
- Depreciation. Insurers who pay the actual cash value of covered items will subtract any depreciation before issuing payment, which may be far less than the amount it will take to replace the item. However, a replacement cost value (RCV) policy will provide the full amount necessary to replace covered items with those of “like” kind and quality.
- Flood losses. Private flood insurance usually will not cover storm surge flooding caused by a hurricane. If your business is located in a flood-prone area, you should purchase coverage through the National Flood Insurance Program (NFIP) to cover the costs of water damage to aircraft and runways.
- Commercial vehicle damage. Planes may be the foundation of your business, but hull damage insurance won’t pay to replace your commercial vans, shuttles, stair platforms, trucks, or taxis. A comprehensive commercial auto policy will pay to replace vehicles damaged by fallen tree limbs, standing flood waters, or other effects of a storm.
- Rented aircraft. If you do not own all of the planes in your charter, you should have a hull damage policy for each rented craft with a limit that will cover the replacement value of each one.
- Aircraft in transit. If you regularly lend your aircraft to other pilots, you may wish to invest in inland marine insurance. This coverage will pay for any damage to your property while it is away from your primary location, such as being towed to an alternate airfield, used to perform stunts for crowds at air shows, or on display in a museum.
- Seasonal business insurance. Commercial carriers make a great deal more during the winter holiday season than in the spring, while sightseeing tours make most of their profits in the summer months. Any company with a “busy season,” including charter flight operations, should invest in seasonal business insurance to protect against profit losses for certain days or weeks of the year.
- Business interruption coverage. Business income loss is the most costly factor in the majority of commercial insurance claims. Any enterprise that is forced to suspend operations loses money every day, both in lost profit and in the costs of making necessary repairs. Business interruption insurance pays to replace the normal projected income of a business, allowing you to pay for operating expenses (such as payroll, aircraft rental, advertising, opening a temporary location, and other out-of-pocket expenses.
If you are having trouble getting the insurance coverage you paid for after a hurricane, the Voss Law Firm can help. Simply fill out the form on this page to get your questions answered by one of our experienced insurance claims attorneys, or learn more about filing a claim in our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.