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Final Flashcards

1
Q

Describe 3 things that are covered by the definition of an aircraft

A

Even when removed:

  1. Navigation/radio equipment
  2. Engine
  3. Tools/equipment carried
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2
Q

Would a SPARE engine be covered under the definition of an aircraft?

A

NO!

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3
Q

Loss of use coverage does NOT apply if:

A

The insured has available another a/c of similar type without charge

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4
Q

Name 3 things medical payment coverage ensures

A
  1. Coverage of funeral expenses
  2. Payment is made regardless of legal liability
  3. Discouragement of liability suits
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5
Q

Admitted liability requires:

A

A full release for all bodily injury after the payment is made

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6
Q

True or False: Damaged landing gear due to a hijacking attempt would be covered by Hull Losses

A

True

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7
Q

The Declarations Page includes:

A
  • The 7 basic items

- Statements about the risk to be insured (from the insured)

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8
Q

Coverage that relates to the physical damage of the a/c and benefits the owner only is:

A

Aircraft Hull Insurance

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9
Q

The two most common a/c hull coverages purchased are:

A
  • All risk-ground and flight

- All risk-not in motion

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10
Q

Define Aircraft Hull Coverage

A
  • Coverage that relates to the physical damage of the a/c and benefits the owner only is
  • “Insurance covering the aircraft including all systems/equipment that are considered permanently attached”
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11
Q

Define In-flight/In-Motion Hull Coverage

A

In-Flight: Time from actual takeoff run to completed landing roll
In-Motion: Time a/c is moving under it’s own power or the momentum generated therefrom, or while it is in flight

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12
Q

Define Insured Value Hull Coverage

A
  • The amount which is stated in the policy as the insured value
  • Represents the purchase price of the a/c if new, or the current market value if used
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13
Q

Define Deductible Hull Coverage

A

The amount of expense to be paid by the insured after a loss, and prior to/in conjunction with payment of any policy benefits

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14
Q

Name 6 major EXCLUSIONS of Hull Coverage (what insurance WONT cover)

A
  1. Wear and tear
  2. Tires
  3. Embezzlement
  4. War confiscation
  5. Depreciation or loss of use
  6. Other
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15
Q

Losses payable and breach of warranty would be considered endorsements of ____ coverage

A

HULL Coverage

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16
Q

Loss of use would be considered an endorsement of ____ coverage

A

HULL Coverage

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17
Q

Spare engine and detached equipment would be considered an endorsement of ____ coverage

A

HULL Coverage

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18
Q

Automatic hull value increase would be considered an endorsement of ____ coverage

A

HULL Coverage

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19
Q

War-risk coverage would be considered an endorsement of ____ coverage

A

HULL Coverage

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20
Q

Unearned hull premium would be considered an endorsement of ____ coverage

A

HULL Coverage

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21
Q

Name 6 examples of CONDITIONS applicable to Liability Coverages

A
  1. The Insured’s duties
  2. The Insured’s assistance and cooperation
  3. Financial responsibility laws
  4. Medical Reports
  5. Subrogation
  6. Action against the company
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22
Q

A/c non-ownership would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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23
Q

Airport premises would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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24
Q

Non-owned physical damage would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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25
Q

Property damage for non-owned hangars would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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26
Q

Search and rescue expenses would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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27
Q

Baggage would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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28
Q

Host-liquor would be considered an endorsement of ____ coverage

A

LIABILITY coverage

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29
Q

What 3 main things does a/c liability insurance cover?

A
  1. Bodily injury (including passengers)
  2. Passengers bodily injury liability
  3. Property damage liability
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30
Q

Name a few aspects of Airport Premises Liability

A
  • Declarations
  • Insuring Agreements
  • Exclusions/Conditions
  • Premium
  • Assistance/Cooperation
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31
Q

What are 6 “Other” Airport Liability Coverages?

A
  1. Medical payments
  2. Contractual
  3. Alterations/Construction
  4. Hangar-keepers’
  5. LOSS OF LICENSE
  6. LOSS OF USE
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32
Q

What are the 3 major functions of Underwriting?

A
  1. Selecting and pricing risks presenter to the insurer
  2. Maximize profits
  3. Obtain a profitable distribution of risks
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33
Q

Accepting or rejecting an applicant is the ______ of risks

A

PRE-selection

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34
Q

Getting rid of undesirable risks is the ______ of risks

A

POST-selection

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35
Q

What are the 4 principle areas of concern when evaluating an aviation risk?

A

Obtain basic info:

  1. Type of a/c and equipment
  2. Pilots
  3. Geographic considerations
  4. Purpose of use
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36
Q

In regards to aviation risks, pricing is based off of:

A
  1. The open market

2. Annual quotes

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37
Q

What are the 5 classifications of AIRLINE insurance?

A
  1. Major
  2. Regional
  3. Charter
  4. All Cargo
  5. Narrow-body only
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38
Q

Satellite launch risk covers:

A

Delays in launch or failure during launch

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39
Q

Third party liability covers:

A

Post-useful life (of satellites)

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40
Q

When several co-insurers are involved, it is usually known as:

A

Quota Share or Vertical Placement

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41
Q

The important factors in airline risk selection are:

A
  1. Management philosophy/success
  2. Profitability
  3. Capital structure
  4. Business plan
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42
Q

____ was designed to protect the owner/operator of an airport against losses arising out of use of the airport

A

Airport Premises Liability

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43
Q

____ are certain clauses in a policy that specify situations or special conditions in which insurance coverage would be invalidated

A

Exclusions!

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44
Q

An income protection plan that provides coverage for occupational disability to professional pilots in the event they lose their medical or authority to exercise privileges is what type of coverage?

A

Loss of License Coverage

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45
Q

What type of coverage provides compensation to an insured against loss resulting from the inability to utilize property in the furtherance of business?

A

Loss of Use Coverage

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46
Q

Coverage that protects from the use of a/c not owned by, or regularly provided to, the named insur-ed would be what type of insurance?

A

Non-Ownership Coverage

Ex: When employees rent, charter or borrow non-owned a/c, or may fly their own a/c on company business

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47
Q

What type of insurance protects a manufacturer/distributor against claims arising from the use of a product?

A

Products Liability

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48
Q

What specific type of endorsement is of particular interest to lien holders?

A

Breach of warrenty

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49
Q

What is NOT a reason for a company to purchase a/c non-ownership liability coverage?

A

If the company may lease a non-owned a/c on an annual basis

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50
Q

Name 3 unique characteristics of aviation exposure:

A
  1. Limiter number of exposure units
  2. Few insurers
  3. Catastrophe exposure
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51
Q

Deductibles generally do not apply to loses caused by:

A
  1. Fires
  2. Theft
  3. Robbery/Vandalism
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52
Q

“In-Flight” commences:

A

With the actual takeoff run

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53
Q

A common hull endorsement found on policies covering older a/c is the:

A

Component Parts Schedule

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54
Q

Liability coverage (think liquor) protects the insured for:

A

Intentional injury to an intoxicated passenger interfering with the safe operation of the a/c

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55
Q

True or False: Most insurers will remove an assumed liability exclusion upon request of the insured

A

FALSE

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56
Q

What type of coverage is designed to reimburse the insured for extra expenses of obtaining another plane when his own business-used a/c is out of service due to damage covered by the policy?

A

Loss of Use

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57
Q

What is true regarding a/c hull and liability insurance?

A

Policy forms can vary within the same company

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58
Q

True or False: An a/c might be “in-flight” according to the a/c hull and liability policy even though it is in fact on the ground

A

TRUE

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59
Q

True or False: The hull coverage excludes any loss or damage to the a/c caused by war

A

True

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60
Q

True or False: Hull coverage would not apply to an engine destroyed by fire while it was removed from the a/c for an overhaul

A

FALSE

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61
Q

True or False: Some policies provide for a return of any unearned hull premium in the event of a partial loss

A

FALSE

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62
Q

True or False: Coverage for newly acquired a/c is usually provided under Hull Insurance

63
Q

True or False: The term “occurrence” is broader than the term “accident”

64
Q

True or False: Only expenses incurred for hospital and surgical procedures are payable under the Medical Coverage

65
Q

True or False: Non-ownership liability provides the owner of an a/c with protection, should they rent or lease it

66
Q

True or False: “Use of other aircraft” applies to the operation of any non-owned aircraft

67
Q

True or False: Hull coverage is designed to protect owners, lessors, lessees, borrowers, and renters

68
Q

True or False: All risk-not in flight is a popular coverage

69
Q

True or False: Loss or damage arising out of a hijacking attempt would usually be covered, unless it was carried out by a governmental authority

70
Q

True or False: War risk coverage only applies in the case of a declared war

71
Q

True or False: Airport premises liability coverage can be included under the Aircraft Hull and Liability policy

72
Q

True or False: Baggage liability is included under virtually all aviation policies, but the limits offered vary greatly among carriers

73
Q

True or False: Insureds that are reimbursed for use of their a/c are covered so long as no profit is made

74
Q

True or False: Buying a/c hull and liability insurance is very similar to buying automobile insurance

75
Q

True or False: Flying Clubs would be considered special uses under the “purpose of use” on the Declarations Page

76
Q

True or False: Non-owned a/c physical damage coverage is basically in-flight hangerkeepers legal liability coverage

77
Q

True or False: Each fractional owner usually carries their own Hull insurance

78
Q

Name 3 things the Declarations Page includes

A
  1. The Policy Period
  2. Coverages and limits of liability
  3. Description of premise
79
Q

True or False: The Declarations page includes Insuring Agreements

80
Q

“Completed operations” under products liability includes:

A

Aircraft repairs, “servicing and installation of parts and accessories”

81
Q

What type of coverage is basically a form of bailee insurance?

A

Hangerkeepers

82
Q

Hangerkeepers liability is written with what 2 limits:

A

A limit per a/c and a limit per occurrence

83
Q

Consequential loss can be described as:

A

Indirect Loss

84
Q

Many suppliers of a/c components purchase AIRCRAFT products liability coverage because:

A

Most other products liability insurance policies exclude all aviation exposures

85
Q

The premium for various coverages under the airport premises liability policy is determined by what 3 things in particular?

A
  1. Area of the premises
  2. Number of admissions
  3. Sales
86
Q

True or False: The premium for various coverages under the airport premises liability policy is determined by the number of a/c operations

87
Q

The products liabiltiy coverage contains 3 limits of liability: a per person, a per accident, and a(an):

A

Aggregare Limit!

88
Q

Personal injury liability covers claims arising out of:

A

Intentional Torts

89
Q

Loss of use coverage applies while:

A

The insured’s a/c is undergoing repairs following an accident

90
Q

Loss of license insurance will:

A

Pay a preselected lump sum of money, less the amount paid out monthly, after a predetermined number of months

91
Q

True or False: Architectural drawling contracts would be covered under assumed liability

92
Q

What are the 3 limits of liability that apply?

A
  1. A per Person limit
  2. A per Accident limit
  3. An aggregated Policy limit
93
Q

True or False: A/c non-ownership liability can be purchased by a corporation because they may be held liable for physical damage to the non-owned a/c

94
Q

True or False: Airport premises liability coverage is primarily designed for airport owners, not tenants

95
Q

True or False: Many exclusions are included in the airport premises liability policy because there are other policies designed to cover such risks

96
Q

True or False: Liability arising out of the work of independent contractors is automatically covered under the airport premises liability contract

97
Q

True or False: Airport premises liability coverage does NOT extend to include the automobile parking facility

98
Q

True or False: Elevators and escalators are covered automatically under the basic airport liability policy

99
Q

True or False: Medical payments coverage under the airport premises liability policy is designed to cover employees and independent contractors employed by the insured, as well as members of the public

100
Q

True or False: Advertising injury liability protects an insured against misappropriation of advertising ideas or infringement upon another’s copyright or title

101
Q

True or False: There is generally no need for non-ownership liability protection if a company is covered as an insured under the owner’s policy

102
Q

True or False: Loss of use coverage is particularly attractive to commercial a/c operators

103
Q

True or False: Loss of license insurance will pay the pilot a predetermined amount per month immediately following the loss of their medical

104
Q

True or False: Any liability arising from the ownership/operation of automobiles/vehicles is excluded under airport premises liability

105
Q

True or False: Most airport liability policies do not provide automatic coverage for new premises and operations because underwriters must review the particular risk

106
Q

An a/c was tied down by an FBO employee on the FBO’s tie-down area, and the a/c was destroyed by a windstorm. What coverage is applicable?

A

Hangerkeeper’s flight or ground

107
Q

A gasoline truck, operated by a fueling company located at the airport, damaged a car in the parking lot. What coverage is applicable?

A

Airport premises PD

108
Q

Someone slipped on some oil spilled on the apron area, which a mechanic failed to clean up after working on an a/c. What coverage is applicable?

A

Airport premises B1

109
Q

A line employee lit a cigarette after fueling an a/c, and a fire ensued causing considerable damage to the a/c. What coverage is applicable?

A

Airport premises PD

110
Q

A counter employee failed to inform an incoming pilot, via unicom, that the county maintenance crew was cutting the grass landing strip. The a/c was damaged when the pilot tried to avoid hitting the mower. What coverage is applicable?

A

Airport premises PD

111
Q

A line employee pumped contaminated gasoline into an a/c causing it to crash after takeoff. What coverage is applicable?

A

Products BI or PD

112
Q

The basic function of underwriting is to:

A

Avoid adverse selection

113
Q

Products liability premiums are based on:

A

The gross receipts

114
Q

True or False: Rate making in aviation insurance differs from price setting in other businesses since prices must be set before costs are known

115
Q

Diversification of risk applies to what 3 major things?

A
  1. Make and model of a/c
  2. Values of similar a/c
  3. Use of a/c
116
Q

Underwriters would probably require additional info. on being used by:

A

A Flying Club

117
Q

True or False: Underwriters are particularly concerned in knowing the pilot’s hours flown during the last 90 days

118
Q

Limited spread of risks leads to:

A

Less credible statistics

119
Q

What purpose would Flying Clubs fall under?

A

Business and Pleasure

120
Q

The primary purpose of underwriting is to:

A

Obtain a profitable distribution of risks

121
Q

True or False: Underwriters often impose pilot standards in the form of minimum hours beyond those required by federal regulations

122
Q

True or False: The pricing problem in insurance is simpler than that in most other businesses

123
Q

True or False: Underwriting involves the profitable distribution of risks

124
Q

True or False: “Select or be selected against” means choosing only the best risks and canceling all marginal accounts

125
Q

True or False: If an insured meets minimum FAA requirements for operating a particular a/c underwriters will generally NOT impose any restrictions

126
Q

True or False: Generally underwriters require a copilot to be aboard all turboprop a/c

127
Q

True or False: Most underwriters agree that recency of experience/experience in the model are more important than total time

128
Q

True or False: Considerably less info. is needed when underwriting airports than a/c

129
Q

True or False: It is important from an underwriting standpoint to have many ratings and classifications

130
Q

What 4 principle areas are underwriters interested in when insuring a/c hull and liability risks?

A
  1. Type of a/c
  2. Pilot abilities
  3. Geographical considerations
  4. Purpose to be used
131
Q

An FBO provides a/c and pilots to fly several executives on a business trip. What would the “purpose of use” be?

A

Full Commercial

132
Q

A utility company uses a C150 for powerline patrol. What would the “purpose of use” be?

A

Special Use

133
Q

A corporation rents its a/c to another company for business and pleasure usage. What would the “purpose of use” be?

A

Limited Commercial

134
Q

A sales representative uses his own a/c to cover his territory. What would the “purpose of use” be?

A

Business and Pleasure

135
Q

A corporate-owned a/c is flown by corporate-employed professional pilots on flights in which no charge is made. What would the “purpose of use” be?

A

Industrial Aid

136
Q

True or False: Southwest Airlines is considered a major or legacy airline

137
Q

List 3 things considered to be major factors by underwriters in the airline risk selection process

A
  1. Management strenght
  2. Capital structure
  3. Business plan
138
Q

_____ is an arrangement where a number of co-insurers participate in an airline placement on a percentage basis

A

Quota Share

139
Q

The most important satellites in use today are:

A

Geostatonary

140
Q

The most popular launch vehicle for geostationary satellites used for commercial purposes is:

141
Q

Pre-launch and manufacturers’ coverage indemnifies the insured for physical loss or damage to the satellite during:

A

Manufacture, testing, shipping and integration with the launch vehicle

142
Q

Pre-launch and Manufacturers’ coverage ceases:

A

At intentional ignition of the launch vehicle

143
Q

_____ providers can purchase coverage for a replacement launch in the event the satellite is not placed in the proper orbit

A

LAUNCH providers

144
Q

What is provided under In-Orbit third party liability coverage?

A

Coverage for damage that a satellite might cause to another satellite

145
Q

True or False: Cargo carriers operate airline equipment but do not publish a schedule

146
Q

True or False: Financial security of the underwriter refers to the ability to service accounts and offer fair prices

147
Q

True or False: Space insurance is typically purchased by commercial entities and not by governmental agencies

148
Q

True or False: It is generally more advantageous for the launch provider to purchase coverage through the satellite owner

149
Q

True or False: All parties to a launch agree to cross-waiver of liability against all other parties

150
Q

True or False: Third party liability coverage is typically purchased by the satellite owner and includes the launch provider as an additional insured

151
Q

True or False: In-orbit third party liability coverage is designed to protect the launch provider for property damage to the satellite

152
Q

True or False: Each insurer may quote a different premium for their quota share (percentage) of the risk

153
Q

True or False: Reinsurance has become a major factor in recent years in the space market

Aviation Insurance (2 decks)

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