Are You Covered? A Chat About Insurance.

If there is one topic that comes up at nearly all of our Flight Instructor Refresher Courses, it might just be the subject of instructor liability. If you freelance, what happens if you or your student has an accident?

Let’s start off with the expected disclaimer, we’re going to discuss some general information – it’s not intended to be specific advice to your situation. That’s what your lawyer is for. Now with that out of the way, let’s get down to business.

The good news is that if you’re a flight instructor working for a Flight Training Unit, you normally carry very little personal liability. Should an accident occur, the student and/or passengers will make their first stop in potential litigation at the FTU. The FTU has many more financial resources to go after than most flight instructors, and in Canada the employer generally assumes liability for the actions of their employees through the concept of vicarious liability. With that being said, there is nothing to stop someone from suing an individual employee of an organization – assuming that a certain threshold of negligence has been reached.

Which brings me to my first point: If you deliver professional and competent flight instruction, in accordance not only with the regulations, but also best practises, you are taking a major step toward protecting yourself. The second point ties in with the first – be sure to clearly document everything that you are doing by keeping a proper and complete Pilot Training Record.

Now it’s time to turn our focus back to the FTU, and look at that flight sheet used for sign-out. You have undoubtedly noticed the disclaimer on the sheet that the student is signing – limiting the liability of the FTU. Take note of how much insurance the operator has stated they carry on that sheet. Most FTUs carry a $5 million liability policy to protect their interests.

Now let’s take a look at the freelance flight instructor. Do you have your students sign a disclaimer limiting your liability? Point three says perhaps you should.

Most flight instructors are happy to freelance – they get to keep the entire $70 or so per hour instead of having the flight school take half or more out of the hourly rate. But, what was the FTU using that money for? Insurance was one thing... though you may say that your freelance student has insurance on their own aircraft. This should be true, but take some time to look at the amount. CAR 606.02 requires only $500,000 of liability insurance for the average general aviation airplane. To put that in perspective, you likely have $1-$2 million of liability insurance on your automobile policy.

This is my fourth point – freelance instructors need to ensure that the aircraft they are teaching on has a suitable amount of insurance. They must also ensure that they are in fact insured on the aircraft by reading the full policy (not the one page proof of insurance) – either as a named pilot or through a clause allowing instruction to a named pilot by the holder of a DOT flight instructor rating. Be sure to keep a copy of that policy in your own records.

The final piece of the puzzle is liability when the instructor is not on board the aircraft – perhaps you’ve sent the freelance student out to do solo airwork and there is an accident. If you haven’t kept good training records, there may be a chance someone wants to try and hold you liable for letting a student go solo when they hadn’t been properly trained.

This is an area where the Canadian insurance market has a gap. In the litigious-happy USA, instructors can purchase their own liability insurance products through AOPA, EAA, SAFE, NAFI, and a host of others. In Canada, your options are limited to products such as COPA’s program for flight instructors or widely available and generic professional errors and omissions insurance.

The downside to the COPA product is that it only applies when the instructor is on board giving dual instruction. We discussed in this case, the flight instructor is normally covered by the existing aircraft policy – so it doesn’t truly fill the liability gap for solo flying. It will also cost about $1500/yr.

The errors and omissions insurance available from most insurers is not an aviation specific product, rather it is something you might see professional engineers and the like obtain - for a cost in the neighbourhood of $10,000/yr. Not something that seems worthwhile to do a few freelance hours on the side of your regular job.

Given how much work it is doing freelance as far as reviewing the POH for an aircraft type you haven’t flown before, checking CAWIS against the maintenance records, arranging for insurance, helping owners develop procedures and checklists, reporting the training to Transport Canada, and so on, it’s no surprise that newer instructors quickly realize how much work it is to start getting that full hourly rate without an FTU taking a cut.

With all of that said, a retired TC Inspector from headquarters in Ottawa told me that he has never heard of anyone successfully suing a flight instructor in Canada. That is certainly good news, though anecdotal at best. In any event, I hope the above best practises can assist you next time you look at taking on a freelance flight training student.