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Protecting Your Airplane Project and Yourself

By Bob Mackey, representative for the EAA Aircraft Insurance Plan, Administered by Falcon Insurance Agency

March 19, 2009 — Whether you are building from plans or from a kit, it doesn’t take long before your investment in your airplane project climbs to a significant level. Just how do you protect your airplane project and yourself?
Did you know your homeowners insurance rarely includes insurance coverage for the value of your airplane project? Did you also know your homeowner’s insurance may not provide insurance coverage if someone is injured in your home-shop where your airplane project is located? So what do you do?
Here is a simple checklist each homebuilder should go through to ensure they have analyzed their risk exposure and considered their options for insurance or self-insurance when undertaking an airplane project.

Homebuilder’s Risk Management Checklist
  • Airplane Project Value - How much do you have invested in your airplane project?
  • What insurance protection do you currently have? Ask your homeowners insurance agent if you’re covered for the value of your airplane project and if your homeowner’s insurance applies to your potential legal liability obligations if someone is injured in your shop where you are building.
  • Research the cost of project insurance. Contact the EAA Aircraft Insurance Plan at: 866-647-4EAA (4322) or visit www.eaainsurance.org to get a quote for liability and physical damage insurance. Generally speaking, liability insurance will cost between $150-$250, and the physical damage insurance is usually about 1 percent of the value of your airplane project. If you do not need liability insurance you may purchase physical damage insurance only for the value of your airplane project.
  • Risk Management Decision - Consider the cost of insurance to protect your airplane project and yourself versus how you might use the money to make your shop safer from bodily injury and your airplane project safer from loss. For example, instead of purchasing insurance you might consider spending your money on fire extinguishers, a fire sprinkler or fire suppression system, fire-safe flammables storage cabinet, safety goggles, hearing protection, safety clothing, newer tools with updated safety guards, etc.

You may wish to expand on this checklist, but at least it is a start. The bottom-line is you need to consider your risk and ways to manage the risk or insurance to offset the potential economic impact of a loss arising out of the risk. If insurance is the right option for you, then all you need to do is move forward with airplane project insurance through the EAA Plan. If you are comfortable with your level of risk, then you should at least invest in safe measures that will reduce your risk of damage or loss to your airplane project, and to also ensure you have liability protection under your homeowner’s insurance.

Have fun and be safe building…and ultimately…flying!

The EAA Aircraft Insurance Plan provides aviation insurance coverage for a wide range of aviation activities and is administrated by Falcon Insurance Agency, Inc. Bob Mackey is senior vice president of Falcon Insurance Agency, Inc. and you are welcome to send your suggestions for insurance-related topics that you would like to see addressed to Bob at bmackey@falconinsurance.com. Thanks for supporting EAA by participating in the EAA Aircraft Insurance Plan. To obtain a quote from the EAA Plan you may call 1-866-647-4EAA (4322) or you may go online to www.eaainsurance.org.


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