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Aviation Laws and FARs - Practical Aviation and Aerospace Law (7th Edition) by J. Scott Hamilton
You are currently the Chief Pilot for a small flight department in a growing company. The company you work for currently uses the aircraft it has for hauling tractor parts from one location to another for both sales and repair. Now the company wants you to purchase an aircraft to haul company managers and executives out to various locations for conducting site surveys for new sales and warehousing locations. You are considering a King Air 350. Once you have purchased the aircraft there are several insurance considerations you must make in setting up the best insurance policy for this new aircraft.
1. What is the appropriate purpose of use to cover the proposed operations in the King Air? Why?
2. What method of valuation will you select for the event of a total loss? Why?
3. On the hull coverage, what risks will you insure against? Why?
4. The company's bank is not willing to finance the purchase of the aircraft unless you can ensure that even if the aircraft is destroyed in an accident, any unpaid balance on the loan will be paid in full. Can you accomplish that through your aircraft insurance even if the circumstances of the accident were such that the insurance company would not have to pay the aircraft owner (such as if the aircraft was being flown by an unqualified pilot at the time of the accident)?If so, describe.
5. Will a policy containing an FAR violation exclusion clause be acceptable? Why?
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