Private airparks are the grass roots of general aviation. From personal-use farm strips to extensive fly-in communities, private airparks and home-built aircraft remind us of the early days of aviation. Still, privately owned airports have special risks and insurance considerations.
Special Considerations for Private Airparks
Ownership: Consider who owns the runways and taxiways. Ownership should not be co-mingled with adjacent lots, owners of other property, or providers of services at the air park. It should be owned in a single, independent entity.
Adjacent Owners: Consider granting revocable licenses for property owners to have access to the runways. That way, in case of bad behavior, a board of directors can revoke an operating license for failure to abide by covenants or other legitimate reason. The license should be contingent upon the licensee holding harmless and indemnifying the airport owner from and against any and all liability.
Illegitimate Operations: Lot owners should not be permitted to house, maintain or otherwise store aircraft that are not owned by the lot owners or their lessees. This protects the facility from liability by outside parties.
Purpose of Use: No commercial operation should be permitted on the airport grounds, especially by the owner of the runway or taxiway. All commercial operations should be licensed to individual operators which maintain appropriate airport liability insurance which would also cover the owner of the facilities.
Roads and Ways Adjoining: It is no problem to insure taxiways, along with runways; however, it should be carefully described in an airport liability policy when there are dual-use areas, such as private roads/taxiways, or, even worse, public roads/taxiways.
Maintenance of the Airport Grounds: Maintenance such as landscaping, mowing and repair of facilities is best provided by a party other than the facility owner. Such providers should be appropriately insured.
Special Activities, Fly-Ins and Air Shows: The entity which is sponsoring the fly-in should have appropriate airport liability coverage, including hangarkeepers coverage and products liability coverage for any food sales, along with any other items to be sold. No standard airport liability policy will cover air show activities in which an F.A.A. waiver is required, whether granted or not. Special coverage must be arranged.
Tie-Down and Hangar Space: The airport facility owner should not have any tie-downs or hangars for transient aircraft. This can open the air park to exposure for claims of damage to the aircraft, including loss of use, extra expense and diminution of value. These claims can be devastating. If there must be guest parking areas, they should be clearly marked, owned and administrated by a third party such as an FBO that carries the appropriate airport liability insurance.
Aircraft Owners Insurance: Each owner of an aircraft (licensee) should provide a certificate of insurance to the airport board that shows that the aircraft is insured appropriately. The airport should keep and maintain premises, products, hangarkeepers, personal injury, pollution, and any other type of liability insurance that is appropriate for the full operation of the airport. As a practical matter, we suggest that operations other than the ownership of the runways and taxiways be performed by a third party or FBO with appropriate insurance.
Definition of Airport Premises: The airport liability insurance policy for the air park should be written with a very broad definition of premises. This can be created by the insurance agent working with the attorney for the airport owner. A good description might be ”Smith Air Park, including runways, taxiways, joint-use roads and access ways and all ways adjoining that can be or are used as an airport premises.” Some insurance carriers will not want to offer wordings as broad as this. As an alternative, the legal documents and licenses which provide a legal definition of the airport should include all of those items, so that when the airport is named as a named insured, it can be understood that the entire wording would be a part of the physical description of the airport. If that is the case, be sure your agent has copies of the legal documents and licenses that define the air park.
Directors and Officers Liability Insurance: It is possible that the persons serving in official and administrative capacities for a private airport or air park may be exposed to legal action, particularly with respect to the licensees or joint owners of the facility. Because of this, directors and officers liability insurance should be purchased in sufficient amounts to protect these people. This coverage is not included in a standard airport premises liability policy.
This guide is to assist you in the general understanding of your airport or air park liability insurance coverage, but it is no substitute for a thorough reading and understanding of your policy. We recommend close contact with your attorney and insurance agent while placing this important coverage. Please review your policy and contact our office if you have any questions or concerns. Your aviation insurance experts are here to help.
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