Course Outline

MGMT 322 : Aviation Insurance

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Last approved: Wed, 20 Jan 2016 13:27:17 GMT

Last edit: Wed, 20 Jan 2016 13:27:17 GMT

College of Business (WBUAD)
Aviation Insurance
An introduction to the basic principles of insurance and risk with special application to the aviation industry will be presented. The course offers an in-depth review of the aviation insurance industry in the United States, including the market and types of aviation insurers.

This course is designed to provide a foundation of knowledge in the laws, legal principles, and insurance coverage applicable to general aviation and commercial aviation aircraft owners, airports, and fixed base operators.

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.

Located on the Daytona Beach Campus, the Jack R. Hunt Library is the primary library for all students of the Worldwide Campus. The Chief Academic Officer strongly recommends that every faculty member, where appropriate, require all students in his or her classes to access the Hunt Library or a comparable college-level local library for research. The results of this research can be used for class projects such as research papers, group discussion, or individual presentations. Students should feel comfortable with using the resources of the library. 

Web & Chat:
Text: (386) 968-8843
Library Phone:  (386) 226-7656 or (800) 678-9428

1. Eichenberger, Jerry A. (2012) General aviation law. (3rd ed.) New York: McGraw-Hill. 2. Vaughan, Emmet J., and Therese Vaughn. (2003) Fundamentals of risk and insurance. (9th ed.) New York: John Wiley and Sons.

Written assignments must be formatted in accordance with the current edition of the Publication Manual of the American Psychological Association (APA) unless otherwise instructed in individual assignments.

ActivityPercent of Grade
Input Grading Item100

Undergraduate Grade Scale

90 - 100% A
80 - 89% B
70 - 79% C
60 - 69% D
0 - 60% F

Graduate Grade Scale

90 - 100% A
80 - 89% B
70 - 79% C
0 - 69% F
Peter O’Reilly - 2/16/2015
Aaron Glassman - 2/16/2015
Bobby McMasters
1-5 Bachelor of Science in Technical Management 1. Employ supervisory and management skills needed to effectively lead and support
others within a team environment across business functions. (BSTM PO-1)

2. Apply research to solve business problems and communicate the results effectively. (BSTM PO2)

3. Analyze and evaluate business functions and processes, identify needs, and structure business approaches using problem-solving, critical thinking, and established methodologies and standards. (BSTM PO-3)

4. Know key principles of business and management disciplines and their business applications; and the possible interrelationships to technical management practices especially in the field of aviation and aerospace. (BSTM PO-4)

5. Demonstrate a proficiency in identifying and solving problems related to the specialty areas of Information Systems, Information Security, Project Management, Logistics and Supply Chain Management, Engineering Science, or Occupational Safety and Health knowledge and the interrelationships to business and technical management practices. (BSTM PO-5)
Key: 390