Inadequate liability limits can leave aircraft owners personally exposed, according to Jonathan Stern, an aviation attorney with Schnader Harrison Segal & Lewis. Stern spoke during the opening session of the 2017 Aviation Insurance Association (AIA) conference held April 30 to May 2 in San Diego, Calif.
Stern says that unlike airlines, which by law must carry liability insurance with minimums of $300,000 per passenger and $20 million per occurrence, general aviation aircraft owners or operators are not required to carry liability insurance except in a handful of states. He cited a 2015 study by the U.S. Government Accountability Office (GAO) that only 11 states required aircraft owners/operators to carry some variation of liability insurance or financial responsibility. While the states differ in who must carry insurance and how much, the GAO found the typical general aviation policy set at $1 million limit of liability, sublimited to $100,000 per passenger.
The problem with low liability limits in aviation is that an accident befalling even a relatively lowly GA aircraft can generate awards far exceeding the policy limit.