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Insurance Requirements for Hangar Lease

Daveflier

Daveflier

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In June 2019 when the Palm Beach Airport Authority awarded Signature Flight Support a five year lease for authority to lease hangars to tenants at North County Airport (F45). The master agreement included that every permittee is required in addition to liability insurance to have ״all risk hull insurance for 100% of total aircraft cost insuring against loss to aircraft or other property”. Each year at lease renewal Signature requires proof of hull insurance. This local government over reach makes no provision for those able to self insure. In addition I find it curious how the local authority would know what total aircraft cost would be. Put two RV-8’s side by side, one with basic instrumentation and the other with a $40,000 IFR panel….and you get the idea. I am in the preliminary stage of preparing to litigate this requirement. My attorney, experienced litigator son, is eager to offer his pro bono services. I am curious to hear from others what hangar lease requirements are in other parts of the country. Thank you.
 
Daveflier said:
I am in the preliminary stage of preparing to litigate this requirement. My attorney, experienced litigator son, is eager to offer his pro bono services. I am curious to hear from others what hangar lease requirements are in other parts of the country. Thank you.
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Sounds like a good plan to lose your hanger.
 
As above, I'm required annually to provide a certificate of insurance to our local regional airport commission. At each renewal, my insurance carrier sends me all the appropriate certificates as a courtesy so that I can forward them easily. it's no big deal.
 
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It doesn’t make sense to require hull coverage. Liability should be all they care about. Sounds like someone didn’t think this out when drafting the master lease.
 
Daveflier said:
...awarded Signature Flight Support a five year lease...
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Is your hangar space within a Signature shared hangar or is this a requirement on an individual T-Hangar? If individual T-Hangar does Signature facilitate moving your aircraft in and out of the hangar for you whenever you take it up?

Signature likely has a hull insurance requirement to appease their own liability carrier's requirement since they are handling ground movement of your aircraft and others parked around it in a shared hangar scenario. But if it is an individual T-Hangar and you do your own in and out then I can't imagine a reason they would be interested in whether you cover your own risk to hull as long as you have adequate liability coverage.
 
Amadeus said:
Is your hangar space within a Signature shared hangar or is this a requirement on an individual T-Hangar? If individual T-Hangar does Signature facilitate moving your aircraft in and out of the hangar for you whenever you take it up?

Signature likely has a hull insurance requirement to appease their own liability carrier's requirement since they are handling ground movement of your aircraft and others parked around it in a shared hangar scenario. But if it is an individual T-Hangar and you do your own in and out then I can't imagine a reason they would be interested in whether you cover your own risk to hull as long as you have adequate liability coverage.
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The only individual who moves my aircraft is me. Signature leases the hangars in a five year agreement with the county. Rereading the documents one more time, the hull insurance requirement is a Signature addendum and not a county requirement. I do find amusing those who did not answer my query as to their insurance requirements, but who jumped on the lawsuit bandwagon. Maybe as they age, and are not able to acquire hull insurance… their tune will change. Having over 24,000 hours, ATP, having a CFIAIME and having flown single seat fighters to wide bodies with hundreds of crossings, and reaching the golden age where you are not insurable for hull will shed light on their foolish responses.
 
Have you spoken or registered a complaint with the County? That would be my first step.
It is common for public entities to assign private companies responsibility for handling all kinds of things from leases on public property to distribution of public funds. It provides a “shield” from liability. They can, and will, blame the “contractor” if something goes wrong.
I have had success simply writing a letter to, in my case the State, alerting them to what their contractor was doing and strongly wording that I felt it was wrong and would “take action” if it wasn’t corrected. In my case, I received a call from a State attorney and then an apology from the contactor.
The County may not be aware and this issue could be put behind you quickly.
If they are aware and do not respond positively, perhaps further steps are necessary.
 
Daveflier said:
The only individual who moves my aircraft is me. Signature leases the hangars in a five year agreement with the county. Rereading the documents one more time, the hull insurance requirement is a Signature addendum and not a county requirement. I do find amusing those who did not answer my query as to their insurance requirements, but who jumped on the lawsuit bandwagon. Maybe as they age, and are not able to acquire hull insurance… their tune will change. Having over 24,000 hours, ATP, having a CFIAIME and having flown single seat fighters to wide bodies with hundreds of crossings, and reaching the golden age where you are not insurable for hull will shed light on their foolish responses.
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The FBO which owns my hangar, on county property under some sort of long term land lease about which I care nought, requires only liability coverage. No additional charge by the insurer. I disagree that this is any kind of "local government overreach" to protect other peoples' property from someone's negligence or accident or what have you. Ask some people here what a fire hangar can do to planes and hangars nearby.

I agree that requiring hull insurance is stupid. Certainly doesn't protect *them*, nor any adjacent hangar occupants, etc.
 
Daveflier said:
The only individual who moves my aircraft is me. Signature leases the hangars in a five year agreement with the county. Rereading the documents one more time, the hull insurance requirement is a Signature addendum and not a county requirement. I do find amusing those who did not answer my query as to their insurance requirements, but who jumped on the lawsuit bandwagon. Maybe as they age, and are not able to acquire hull insurance… their tune will change. Having over 24,000 hours, ATP, having a CFIAIME and having flown single seat fighters to wide bodies with hundreds of crossings, and reaching the golden age where you are not insurable for hull will shed light on their foolish responses.
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Dave,
I understand what your are saying, and I get your frustration. As an airman with similar credentials, I get what you are saying. It seams the insurance companies own our ass. Fortunately, at our airport in Ohio, we are not required to provide any insurance credentials for stored aircraft. But for aircraft hull insurance, your credentials don’t matter when you reach a certain age. Also, unfortunately, actuarial tables don’t support an argument in favor of competent, somewhat older pilots. Those details are not tracked, and therefore don’t count.
 
It's unfortunately true that insurance companies are now the real driving force behind "regulations". Local flying club has 172s, 182s, Mooney. Who sets the standards for who can fly what? Not the Club, not the FAA. It's their insurance company. And I (age 75) know that the day will come when I shouldn't be PIC anymore. Will I be rational enough to know it? I hope so. But I have personally witnessed where an over the hill pilot refused to acknowledge it. Insurance companies are stuck in the middle. Lacking any definitive low-cost test, they just pick an arbitrary age and say "no more". I wish I had a better answer.
 
Daveflier said:
In June 2019 when the Palm Beach Airport Authority awarded Signature Flight Support a five year lease for authority to lease hangars to tenants at North County Airport (F45). The master agreement included that every permittee is required in addition to liability insurance to have ״all risk hull insurance for 100% of total aircraft cost insuring against loss to aircraft or other property”. Each year at lease renewal Signature requires proof of hull insurance. This local government over reach makes no provision for those able to self insure. In addition I find it curious how the local authority would know what total aircraft cost would be. Put two RV-8’s side by side, one with basic instrumentation and the other with a $40,000 IFR panel….and you get the idea. I am in the preliminary stage of preparing to litigate this requirement. My attorney, experienced litigator son, is eager to offer his pro bono services. I am curious to hear from others what hangar lease requirements are in other parts of the country. Thank you.
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Kyle Boatright said:
I'm required to indemnify the airport authority, have $1M of liability insurance, and list the the airport authority as an additional insured, as I recall.
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You found a carrier who will write Liability only? Who is it? I thought I had asked every carrier (and been told no by every one of them.)
 
I'm required to carry liability insurance as a condition of tenancy, but not hull. I agree with a previous poster suggesting that you reach out to the county and outline why you don't think it's a appropriate to require hull coverage. That may fail, but it's worth a try. If so, I've seen a few cases where tenants have posted a bond in lieu of insurance, basically providing evidence that they have the means to cover the loss. That would still cost $, but there wouldn't be an age limit, so that might be a fall-back ask for you.
 
I have liability only from Avemco. They also state they will not drop you when you reach 80. They may increase premium when you reach 82 and this year they added the requirement for an annual Basic Med physical and annual flight review. I am about to turn 81.
 
Do they specify that the insurance has to be from a specific insurer? Surely "self insured" is a valid response. Maybe showing you have a bank balance capable of replacing your aircraft would be sufficient in that regard. Maybe not.

At my airport, one of the last two that's actually still owned by the federal government here in Canada, the requirement is liability and naming the airport as a named insured. Our hangar complex has the same requirement, so that means listing the airport, and the hangar complex as named insureds on your papers. But nobody has asked for proof of either.
 
How does a public use airport deal with this regarding transients.
Am I correct that the highest liability coverage available for EAB is 1mil?????
Boeing 737-800 price $106.1mil
777 depending on model, $306.6 to 375.5mil
What benefit is 1mil liability is you damage one of those aircraft?
Part of the reason for absurd insurance rates is the Collings B17 accident at BDL. The B17 crossed the area where airplanes would be holding for the active runway at that time. We would be dealing with a very different world had the B17 hit a 737 full of passengers.
 
jrs14855 said:
What benefit is 1mil liability is you damage one of those aircraft?
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That’s at least a (relatively small) pot of money to throw at a case, and it may be enough. Many lawyers aren’t all that interested in pursuing individuals to their last dollar. It tends to be time-consuming and expensive to zero out an actual person. Your mileage may vary. Materially. 😬
 
City owns my hangars, and requires being a Named Insured. No hull requirement.
 
jrs14855 said:
How does a public use airport deal with this regarding transients.
Am I correct that the highest liability coverage available for EAB is 1mil?????
Boeing 737-800 price $106.1mil
777 depending on model, $306.6 to 375.5mil
What benefit is 1mil liability is you damage one of those aircraft?
Part of the reason for absurd insurance rates is the Collings B17 accident at BDL. The B17 crossed the area where airplanes would be holding for the active runway at that time. We would be dealing with a very different world had the B17 hit a 737 full of passengers.
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You may damage a 737 or a 777, but you are not likely to "total" it.
 
My little private airport is pretty chill about this. The two guys who own it require me to have $1mil liability and other than that, they couldn't care less what I've got going on as long as the check clears every month.
 
As a point of interest, my hangar neighbor who is age challenged like myself is a retired corporate counsel for a large Florida concern.
He called Assured Aircraft Partners, the insurance affiliate of the AOPA, spoke to their legal department and asked about the Signature FBO requirement for hull insurance for hangar lessees. They informed him that such a request makes no legal or monetary sense as they (Signature) has “NO INSURABLE INTEREST” in a privately owned aircraft. It would be comparable to any of us trying to insure our neighbors boat or vehicle that we do not have ownership interest in. I m in the preliminary stages of pursuing this matter. For those 11 individuals who responded to my request for local insurance requests I thank you. For those who trolled with snide remarks…go play somewhere else.
 
Daveflier said:
As a point of interest, my hangar neighbor who is age challenged like myself is a retired corporate counsel for a large Florida concern.
He called Assured Aircraft Partners, the insurance affiliate of the AOPA, spoke to their legal department and asked about the Signature FBO requirement for hull insurance for hangar lessees. They informed him that such a request makes no legal or monetary sense as they (Signature) has “NO INSURABLE INTEREST” in a privately owned aircraft. It would be comparable to any of us trying to insure our neighbors boat or vehicle that we do not have ownership interest in. I m in the preliminary stages of pursuing this matter. For those 11 individuals who responded to my request for local insurance requests I thank you. For those who trolled with snide remarks…go play somewhere else.
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My simple-minded and short of coffee guess would be that Signature, Atlantic and Million Err would rather have their hangers filled with the large foot print, big iron aircraft and are using a rear-door approach to push the little pockets of money out.
 
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It would be interesting to hear Signature’s rationale for requiring tenants to carry hull insurance. I can’t really conjure one, although I also may be insufficiently caffeinated.
 
We all read here how an electrical fire basically wrote off a line of hangared G/A planes. It's all fun and games until the lawyers and insurance companies start pointing fingers and racking up billable hours. It gets more interesting as most people who hangars on public airports really are only sublease folks and then they have sub-sub leasers. And usually everyone is supposed to have insurance naming the various other folks as additional named insured. That said I would think that Signature would only care that u have a million or so liability only and they are named insured in your policy.

I'm no attorney but I suspect the fine print in the airport's master sub lease agreement gives Signature the right to do whatever they want to do and probably enforce the airport and FAA hangar requirements as well. Kind of cute that the airport is washing their hands of the admin of their hangars. I don't blame them really.

If you want some serious fun - get on the board of a Hangar Unit Association at a large airport and watch the wackiness that ensues. People storing boats and car collections in hangars....being the go between of the ever changing airport admin and various sub peons. We have several collections of city owned hangars in the greater PHX metro area and the stories that you hear are unbelievable when you go to the meetings and hear from the folks who admin the HUAs around the valley...and then the biannual fire inspections....oh boy....
 
Daveflier said:
As a point of interest, my hangar neighbor who is age challenged like myself is a retired corporate counsel for a large Florida concern.
He called Assured Aircraft Partners, the insurance affiliate of the AOPA, spoke to their legal department and asked about the Signature FBO requirement for hull insurance for hangar lessees. They informed him that such a request makes no legal or monetary sense as they (Signature) has “NO INSURABLE INTEREST” in a privately owned aircraft. It would be comparable to any of us trying to insure our neighbors boat or vehicle that we do not have ownership interest in. I m in the preliminary stages of pursuing this matter.
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That's what everyone here has been saying. I think the only debate is the best course of action, be it working with the FBO to convince them to change the terms (ha!), going to airport management (better, perhaps), taking it to the county airport commission, contacting FSDO (might be a violation of a Grant Assurance?), looping in AOPA, or getting attorneys involved (ick).

In my experience, once you mention "lawyers", everyone's position hardens, things get harder to resolve, and the cost goes WAY up, quickly, for everyone.

Daveflier said:
For those 11 individuals who responded to my request for local insurance requests I thank you. For those who trolled with snide remarks…go play somewhere else.
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Boy, somebody needs to grow a thicker skin. Imagine people making snarky remarks on (gasp!) an Internet forum!

Best to leave the moderation here to the moderators before telling people what they can or can't post.
 
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Dugaru said:
It would be interesting to hear Signature’s rationale for requiring tenants to carry hull insurance. I can’t really conjure one, although I also may be insufficiently caffeinated.
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So if hangar tenant A’s aircraft damages Hangar Tenant B’s aircraft, hanger tenant B has a first party insurance claim on his own policy, even if hanger tenant A’s liability policy is lapsed or insufficient to cover the damage.

Also, contract pilots should be concerned about an owners hull coverage, and/or how their contract reads with regards to Hull damage.
 
Marlonyoung said:
So if hangar tenant A’s aircraft damages Hangar Tenant B’s aircraft, hanger tenant B has a first party insurance claim on his own policy, even if hanger tenant A’s liability policy is lapsed or insufficient to cover the damage.
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I can see why B would care about having hull coverage. I just don’t see why Signature would care. I don’t see how Signature’s pocketbook is at risk in the scenario you describe, even if B has no hull coverage. I may be missing something.

My opinion: if there was a compelling business/liability reason for FBOs to demand that hangar tenants carry hull insurance, (1) we’d be able to identify the reason, and (2) basically all FBOs would demand it. Since neither 1 nor 2 appears to be true, I’m guessing there’s no really good reason. But I’m not Signature, and maybe they understand something I don’t.
 
Marlonyoung said:
So if hangar tenant A’s aircraft damages Hangar Tenant B’s aircraft, hanger tenant B has a first party insurance claim on his own policy, even if hanger tenant A’s liability policy is lapsed or insufficient to cover the damage.

Also, contract pilots should be concerned about an owners hull coverage, and/or how their contract reads with regards to Hull damage.
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in the grand scheme it doesn't matter. the only real difference is that the owner of aircraft B gets paid by his insurance company. in the background its the same end game because insurance company B is going to sue insurance company A for their loss instead of owner B having to sue insurance company A.
 
I am based at a privately owned, public use airport. Several years ago, the owner instilled the liability insurance requirement in the leases, with indemnity clause. Several tenants refused and simply lost their lease..gone in 30 days notice. I pay less than $300, and after reading , and knowing personally, folks who lost their aircraft in disastrous hangar fires not caused by their doing, I surely want everyone around my to have insurance also. A runaway plane errantly started almost took my hangar out a few years ago..shook me to the core thinking of the outcome of an uninsured tenant. No airport wants to self insure their tenants , so it's up to you. Pointing my nose in the air and moving out would not be my option for certain. I have a very good lawyer friend who specializes in aviation litigation, and he said comply or get booted.
 
Daveflier said:
In June 2019 when the Palm Beach Airport Authority awarded Signature Flight Support a five year lease for authority to lease hangars to tenants at North County Airport (F45). The master agreement included that every permittee is required in addition to liability insurance to have ״all risk hull insurance for 100% of total aircraft cost insuring against loss to aircraft or other property”. Each year at lease renewal Signature requires proof of hull insurance. This local government over reach makes no provision for those able to self insure. In addition I find it curious how the local authority would know what total aircraft cost would be. Put two RV-8’s side by side, one with basic instrumentation and the other with a $40,000 IFR panel….and you get the idea. I am in the preliminary stage of preparing to litigate this requirement. My attorney, experienced litigator son, is eager to offer his pro bono services. I am curious to hear from others what hangar lease requirements are in other parts of the country. Thank you.
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I have $1M liability per lease for T-hanger. There is no requirement to have hull coverage in my lease.
 
fixnflyguy said:
I am based at a privately owned, public use airport. Several years ago, the owner instilled the liability insurance requirement in the leases, with indemnity clause. Several tenants refused and simply lost their lease..gone in 30 days notice. I pay less than $300, and after reading , and knowing personally, folks who lost their aircraft in disastrous hangar fires not caused by their doing, I surely want everyone around my to have insurance also. A runaway plane errantly started almost took my hangar out a few years ago..shook me to the core thinking of the outcome of an uninsured tenant. No airport wants to self insure their tenants , so it's up to you. Pointing my nose in the air and moving out would not be my option for certain. I have a very good lawyer friend who specializes in aviation litigation, and he said comply or get booted.
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I believe his contention is with the hull requirement, not the liability typically found in leases.
BTW...insurance companies don't certificate the value of the aircraft. I don't even know how one would comply with this statement...what is the "cost" of an E-AB? What is "other property." This is super vague...

״all risk hull insurance for 100% of total aircraft cost insuring against loss to aircraft or other property”
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