Liability Question

Mein frau has raised an interesting question concerning her potential liability and my flying any type of airplane.

Let's take one worst case scenario: I blast off from Podunk Int'l, can't make full power, and slide through the fence at the end of the runway and plow through a school bus full of kids. Miraculously, I get thrown clear sustaining injuries from slight to severe, however several of the kids are killed, or sustain extremely debilitating injuries. Most probably the resulting lawsuits would exceed whatever liability insurance that I, or most of us, carry.

My wife's question, then: "Can her assets, considerably greater than mine, be attached in a liability lawsuit generated from my liabilities incurred in an aircraft accident?"

She has not been satisfied with, "Dear, don't worry."

Barney

Yup

Your married whats yours is hers...Including liability.

Frank

The answer is:

"It depends".

Is it a community property state?
Do you have an asset separation agreement with your spouse?
How good is her lawyer?
How good is the Plaintiffs lawyer?
Do you have any asset protection in place?
Do you have an unassailable homestead (texas,florida)?

There is no quick and dirty answer to your question.
Get a REAL GOOD, REAL EXPENSIVE asset protection attorney to discuss your unique situation.

Just MHO

I highly suggest that if you have significant assests that you seek the advice of your attorney and your insurance agent. Umbrella liability policies are fairly reasonable and they get cheaper depending on the amount of liability coverage you already carry on your aircraft. See if increasing your coverages is more cost effective than a excess or umbrella policy. Liability in comparison to hull coverage is pretty cheap, even more so to add more coverage to an already existing policy. Remember that if your not negligent the awards are not as costly, unlike an event where you personally contributed the cause through your own preventable but alas negligent actions. Fly safe and smart. Better yet, find a way to incorporate and register the aircraft under the corporation.

Lawyers

I would consult an assets protection attorney in your state. Your scenario could apply to you loosing your brakes in your auto. Since her assets are a lot more than yours she and you probably need to find how to protect them from a normal and far more likely scenario.

My wife always asks this type of hypothetical question when she is looking to plant a seed of "another reason you should not fly." I usually come back in a friendly (she is my best friend) way and make the hypothetical question more universal as I mentioned above.

umbrella

Rick S. said:

I highly suggest that if you have significant assests that you seek the advice of your attorney and your insurance agent. Umbrella liability policies are fairly reasonable and they get cheaper depending on the amount of liability coverage you already carry on your aircraft. See if increasing your coverages is more cost effective than a excess or umbrella policy. Liability in comparison to hull coverage is pretty cheap, even more so to add more coverage to an already existing policy. Remember that if your not negligent the awards are not as costly, unlike an event where you personally contributed the cause through your own preventable but alas negligent actions. Fly safe and smart. Better yet, find a way to incorporate and register the aircraft under the corporation.

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My Insurance Company.....State Farm has my business and personal insurance as well as my umbrella policy......they would not cover the RV-6 under the umbrella policy, or any airplane. Which seemed odd to me. Umbrella sounds like a cover everything policy. Does anybody else have umbrella coverage on there RV?
Thanks

Answer back from attorney

My attorney answered:

Your wife may have reason to be concerned depending on the answers to the following questions:

1. Are your wife's assets - marital assets or separate assets? If marital (meaning did she commingle her separate assets with your after the marriage or have you and she acquired assets since the marriage) if so, then she may be exposed. If not, then she is probably safe from an adverse judgment against you in your individual capacity.

2. When you fly - do you fly as a) an individual, or b) as an employee of a corporation. Individuals have unlimited exposure, however if you fly as an employee of corporation then under most circumstances you would have no individual exposure.
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My wife and I were re-married in 2001 (after separating assets via our divorce in 1993) and have maintained separate assets since - so, looks like she's safe.

Ours may be an unusual situation, as we have not commingled assets (nothing in both our names, as joint owners), but others might be aware of how this situation might apply to their own asset situation.

Good response...that's why I suggest talking with your agent, the agent who brokered your aircraft policy. They should know all the specialty lines carriers who could underwrite this if possible. In the event described in the post that started this, it was pretty catastrophic. My own feelings are your normal 1-2 million liability is pretty adequate coverage. Another reason to keep school buses away from the departure end of runways.

It may be more savy to increase your existing coverage, State Farm and most other "commonly know" carriers won't provide excess let alone primary coverage for aircraft. If you look up aircraft in their policy, the next word is usually "excluded" unless one hits your dwelling then the dwelling has coverage. There are several Swiss and London companies who do write excess and reinsurance coverage that includes aircraft. It is geared more towards business ops and may not be cost effective for us little guys or individuals.....

Hehe...then there is always divorce...

How does this work with experimentals?

L'Avion said:

When you fly - do you fly as a) an individual, or b) as an employee of a corporation. Individuals have unlimited exposure, however if you fly as an employee of corporation then under most circumstances you would have no individual exposure.

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This is an interesting thread. I have a question concerning the above advice though. According to the rule quoted below taken from this experimental aircraft thread, I do not see how this can be done with our experimental aircraft. If an experimental aircraft cannot be used for "carrying persons or property for compensation or hire." How can an "employee" of a corporation fly the aircraft "as an employee" without the airplane being used to carry persons or property for compensation or hire"?

PART 91--GENERAL OPERATING AND FLIGHT RULES

Subpart D--Special Flight Operations

Sec. 91.319 Aircraft having experimental certificates: Operating limitations.

(a) No person may operate an aircraft that has an experimental certificate--
(1) For other than the purpose for which the certificate was issued;
or
(2) Carrying persons or property for compensation or hire.

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a piggy-back follow-up question...

did/do you carry personal renters insurance for the GA planes you fly?

Re: How does this work with experimentals?

From my attorney's answer:

"When you fly - do you fly as a) an individual, or b) as an employee of a corporation. Individuals have unlimited exposure, however if you fly as an employee of corporation then under most circumstances you would have no individual exposure."

The attorney did not know that I'm now flying an experimental, and remembered me as having flown for several air carriers, and a few corps, thus the above.

RVbySDI said:

. If an experimental aircraft cannot be used for "carrying persons or property for compensation or hire." How can an "employee" of a corporation fly the aircraft "as an employee" without the airplane being used to carry persons or property for compensation or hire"?

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vans employees do it all the time. as do many more companys. when a new plane is prototyped it is experimental until certificated by the FAA.

Lawyer up

Get a lawyer and accountant and do what rich people do, hide their money. Some put planes in some limited liability company name. On the other hand lawyers are the devil. If the pockets are real deep, it makes a better more attractive target. That is what insurance is for. In many states your primary home is protected from liability (not all). That is why people buy property in Florida, its protected from lawsuits.

What happens when a rich persons private Bizz jet crashes?

You can worry your self silly. I suggest you avoid crashing all together? Tell the wife you are the greatest pilot and plane builder in the world and will never crash into a school bus.

The odds are probably higher that you will injure others in your car than in your airplane, and what is your liability exposure there?

I mean, there are things we can do other than fly that will expose us to legal liability. If you (she) is overly concerned about being sued big time, then don't drive, either.

Cartaire said:

did/do you carry personal renters insurance for the GA planes you fly?

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I did/will again, absolutely. The aircraft owner's insurance protects THEM and their employees, not the pilot. Unless it's a complex single or a twin, most of us could probably pay for a rental if we total it. But the hypothetical "school bus full of kids", or someone's house, or a passenger's injuries are a completely different game, much greater magnitude of $$$$$.