Advisen wrote a white paper that presents the rationale for why mid-sized and smaller manufacturers should strongly consider purchasing aircraft products liability insurance. The free, 6-page paper is sponsored by the Aircraft Builders Council.
The Aircraft Builders Council (ABC) was founded in 1955 at a time when aviation products liability coverage was in its infancy and not readily available on the open markets. Working together, sharing a common goal, a group of aviation manufacturing companies, brokers and insurers developed a products liability insurance facility for the benefit of manufacturers in the aviation industry. Since its formation, the Aircraft Builders Council program has provided aviation products liability insurance and continues to be the leader in developing coverage to satisfy the dynamic needs of the industry that it serves. Participants in the program may now secure coverage limits of up to USD 1 billion.
Aircraft Products Liability Insurance is an affordable insurance for most aircraft product manufacturing businesses that provides a risk financing tool that mitigates financial loss for aircraft and space mishaps. The Aircraft Building Council highlights the importance of having this type of insurance. First, the protections afforded in the past are being eroded as the government and prime manufacturers are figuring out they cannot shoulder the whole load of some of the programs they lead. Second, primes have had a number of losses that have been the result of poor product design and/or faulty workmanship from their suppliers where they have had to pay for the whole loss. They no longer want to do this and pay extra premiums for work that is somewhat out of their control as they are looking into mitigating their risks. In some instances, the primes have taken over the company that has caused them the loss that has ruined the financial well-being of the owners that were looking to sell the business at some point in the future in order to retire. Third, the government is looking to the insurance community to pick up risks previously covered by federal indemnities mitigating the huge cost or potential cost to society. This is a trend worth watching for those who do not believe the government will not do it.
Download the white paper The Aircraft Builders Council: Still Unique and a 57 Year Old Novelty.