Aviation Insurance | Glossary (2024)

Aviation insurance is an important precaution for situations where planes in flight experience technical or weather difficulties that cause wrecks or forced landing. There are also the costs associated with the treatment of injuries for the pilot and any passengers, an emergency landing if necessary including search and rescue, as well as money needed to fix physical damages incurred by the aircraft itself. This coverage also secures against claims or lawsuits that may be filed by non-operators who were on the aircraft. It is important for all owners of machines made for flying to have this insurance, particularly if their craft is used for business.

Companies with civilian employees working in foreign countries in support of the military must also be aware of Defense Base Act Insurance, which is a kind of workers’ compensation insurance required for certain types of employees under a federal law known as the Defense Base Act. Penalties for noncompliance bars an insured defending itself against a claim from asserting certain defenses, such as contributory negligence, assumption of risk, and the fellow-servant rule. Failure to provide the benefits that the DBA requires also constitutes a misdemeanor, which may include a fine up to $10,000, up to a year imprisonment, or both. A company’s chief officers may be personally liable for payment.