Upon course completion, students will be able to:
1. Describe the evolution of aviation insurance from 1911 to the present. Identify the major markets for aviation insurance and explain the primary aviation insurance coverage purchased by each of these markets. Identify the major ways that the FAA may become liable for their actions. Explain the two types of channels of distribution used by insurance companies to market their products and the role of agents and brokers.
2. Describe the concept of risk from an insurance standpoint. Discuss the burden of risk and its transferability. Define insurance and the law of large numbers and explain their relationship. Define reinsurance. Differentiate between facultative and treaty reinsurance and illustrate quota share, surplus share, and excess of loss reinsurance. Name and explain the five steps in the risk management process.
3. Explain the legal principles of indemnity, insurable interest, and subrogation as they pertain to insurance contracts. Describe the legal basis of liability and illustrate, by using examples, vicarious liability, strict liability, and liability without fault. Identify defenses available to defendants and damages available to plaintiffs. Discuss liability according to contract law.
4. Explain the four prerequisites to an enforceable contract. Explain the role of applications and binders in the formation of an insurance contract. Identify the components of insurance contracts and the unique characteristics that differentiate an insurance contract from other contracts. Compare misrepresentations, warranties and concealment which influence the enforceability of insurance contracts. Explain the authority of agents and brokers.
5. Describe the following components of an Aircraft Hull and Liability Policy: declarations page, the three major coverage insuring agreements and the major exclusions pertaining to each insuring agreement. Discuss the conditions governing cancellation, flying other aircraft, duties of insured after an accident, and deductibles. State and describe three common endorsements used to modify the Aircraft Hull and Liability policy.
6. Identify the coverage areas included in a Commercial General Liability Policy designed for airports and FBOs, and explain the coverage afforded by the following endorsements: Hangar keepers, medical payments, contractual liability, personal and advertising injury liability and air meet liability. Explain the following aviation liability coverage: aerial application, individual and corporate non-ownership, manufacturer’s product liability, excess liability, and loss of use coverage.
7. State the three major profit objectives of underwriting and explain the underwriting functions, sources of information, and the importance of type of airplane, pilot, geographical location, and use of the airplane in the final decision of the underwriter. Identify three major criteria used in the process of airline risk selection. Describe the important elements considered by underwriters in determining airline prices. Define quota share or vertical placement.
8. Describe the three major types of satellite insurance. Discuss the important factors considered by underwriters when selecting and pricing space insurance. Highlight the following space insurance design considerations: sum insured, policy period, attachment of risk, termination of risk, and definitions and deductibles.
9. Explain and give examples of property covered under a commercial property policy. Discuss business income and extra expense coverage. Explain the following risk management decisions areas: replacement versus actual cash value and coinsurance versus full value. Explain the cargo legal liability endorsement and the inland transit policy. Explain the four insuring agreements in a Commercial Auto policy.