Warbird Information Exchange

A question for all of you that are involved with non-profit (501 (c)(3))organizations that sell rides on aircraft...

Assuming you have a vintage aircraft that you sell/wish to sell rides on, for the benefit of your non-profit organization (a B-17, B-24, DC-3, B-25, etc.) what kind of insurance do you have to carry on your aircraft? I would assume that there is some coverage, but most of the organizations that I've been around have a standard release of liability that every rider has to sign before boarding the aircraft. Those seem to be worded to completely release the organization from any and all liability in case of an accident. Do those hold up in court? And assuming they do, what kind of insurance would you carry on your aircraft? What kinds of costs would be involved? It just seems to me that if such waivers/releases really serve the purpose that they're designed to serve, there would be little need for insurance for the aircraft other than coverage that would, in the event of an accident, pay the organization the value of the aircraft and would be sufficient to compensate anyone hurt on the ground by the aircraft. Is that true?

Second question- I've been told that some 501(c)(3) organizations will set up a 501(c)(2) to hold title to the aircraft that are going to be used for rides, and that will provide an additional liability shield. Is that a good idea? Does that work?

I am asking because I'm involved in an organization that may in the long-term seek to sell rides on a vintage aircraft. As is the case in any organization, there are those in favor and those opposed. Those opposed most often raise issues of insurance cost and liability exposure for the organization. I am trying to start informing myself about how others address these issues so that I can intelligently counter their concerns. Thoughts? If some of you would be more willing to talk via PM or e-mail, please feel free. If you are willing to discuss it here, I think many of us have a lot to learn.

Thanks!

kevin

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FOUND the elusive DT-built B-24! Woo-hoo!!!

As a retired lawyer, my guess is the liabilty releases really will not or rarely hold up in court. Why, pretty simple, the entity doing the suing isn't signing it.

What am I saying here. You sign it, a crash happens and you die. Well at best, you cannot sue since you are DEAD. BUT your estate, which doesn't exist until you die can sue and it didn't sign the release. Also, the wife and kids didn't sign the release. YOU CANNOT sign away the rights of OTHERS to sue simply so you can sit in the back seat of a WWII fighter and get screwed into the ground. Nobody can sign away the rights of their "heirs" (we don't even know who your heirs may be until 9 months after you die), or family or dog to sue.

Sorry, but thats the way it works. Also the more assets available to recover (IE bigger museum with more planes) means more legal pressure to sue. There is more to get and the quality of lawyers will go up a LOT.

Also if you have your plane in a corp or LLC and that is the only asset of that corp, and it has no other purpose than to shield you from liability, I wouldn't hold my breath on that holding either.

Best way not to get sued is not to give or sell rides. Someone here posted that a fighter owner said "Nobody in the back seat, I'm rich and intend to stay that way".

Mark H
PS: Don't blame the lawyers, blame the 6 or 12 juriors (or your insurance company) for the decision to pay money in a lawsuit.

An understandable but sad, and in the longer term, perhaps counter-productive position.

If we want warbirds and vintage aviation to remain a viable interest, we need a quarum of new enthusiasts and a degree of understanding from the wider community; particularly as the general public 'know' 'old things are dangerous'. As we know, the vast majority of old aeroplane flights are completed safely; but that's not 'news'. Each successful vintage flight with a newbie aboard is a step in gaining another advocate who can contrast their personal experience against the relentless negativity of the media.

I'd be interested in a quick straw poll for WIX posters as to hasn't had a ride in a warbird either as a freebie, thank you, or paid joyflight. I'd wager it's a very small proportion, and further, I'd bet those that haven't would (mostly) like one.

To come back on topic, the question relates to US law and liability. Other countries have different approaches, and it's clear that you can buy your way onto a flight of a number of interesting ex-military and transport aircraft around the world. However, in most cases, it's a relatively low-key presentation of the opportunity, implying there are some issues with offering an airline equivalent opportunity and perhaps liability. (A slight tangent in that I've just edited an article on an aircraft in Australia that was unable to do the original proposed revenue job as it'd been left on the US civil register.) Might be worth talking to operators in the UK, New Zealand, Holland and Canada as well as looking at the US situation. It won't help directly with the legal position, but it might show some of the approaches available.

HTH.

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James K

"Switch on the underwater landing lights"
Emilio Largo, Thunderball.

www.VintageAeroWriter.com

There is an article about this in the AOPA magazine right now. It basically says that they do not hold up in court as P51Mstg stated.

back in the 60's the ortner brothers did airshows at their airport & offered rides at a penny a pound in regard to passenger weight. no signing waivers, disclaimers, etc. those were the days.

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tom d. friedman - hey!!! those fokkers were messerschmitts!! * without ammunition, the usaf would be just another flying club!!! * better to have piece of mind than piece of tail!!

CAF PBY CRASH! Back in the 80's.
Robbie

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Fly Fast Make Noise!

Early 80s nostalgia…

Rides in the Cub were $25, the Stearmans $35, and the T-6 $55. The Stearmans were by far the most popular at shows. The rides were only about 15-20 minutes long, but nobody ever complained (or got sick).

The term “Hold Harmless Agreement” was not in our vocabulary.

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Commemorative Air Force
Experimental Aircraft Association
Warbirds of America

What are you waiting for? Join us!

Best way to contact me- email my last name @gmail.com

That would make T-28 rides about $75 and AD rides about $100
Sign me up

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Don't touch my junk!!

Its too bad you can't add a "common sense clause" to these things forbidding your next of kin from pursuing a lawsuit should something happen.

B

Why not? They ARE part of the problem.
Even having one as a son-in-law hasn't changed my opinion about that

I work for a museum that has a policy of no paid rides. They could bring in quite a bit of money doing so but are afraid of the liability. To bad our system is the way it is...

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"They can teach MONKEYS to fly better than that"

http://www.heritageflight.org
http://www.bravo369.org

Jack Cook wrote:



In 2007 AD rides are not available for purchase at any price, unless you are Jack Cook, and then all you have to do is get to Saint Louis and they are free.

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Eric

"I spent most of my money on alcohol, women and skyraiders....and the rest of it I just wasted."

I am looking to do this at some point with the L-5, and here is what I found. These figures are based on an annual insurance rate of X dollars paid for an insurance premium on our aircraft. Right now, we pay X dollars for our policy, which allows the aircraft to be used for pleasure and some business flying, but is not insured for instruction or commercial operation. For a front seat training seat, which allows the aircraft to be used for part 91 training operations with an instructor in the back seat, the insurance was 1.9X. That policy did not allow solo flight by students, and did not include any other commercial operations. We looked at banner towing as an option, and that was 3-4.5X. You should know that X was 2-4 % of the hull value on the aircraft, with some sizeable deductibles. The insurance was nullified by any terrorist act or illegal act. So if ANY discrepancy was found in the aircraft post-incident, including any FAR violation, you got nothing.

Now for the waivers. A waiver has to be signed, even if the estate doesn't go on the flight. By FAR, any person who goes flying must receive a proper safety briefing about the hazards of the flight prior to participating in the flight operation. In other words, if you put somebody in an airplane without telling them how to use an exit door, you are violating an FAR. So you need the waivers to demonstrate that you have instructed them in the hazards of an operation. Yes, the grubbing lawyers who mislead the jury into thinking that airplanes operated like this are deathtraps will jump on no signed waiver. This waiver is another bit of evidence that you prepared the person for his impending death and that he made a conscious choice to go with you, not that he was tricked into plunging to his fiery end without prior advice that it might happen. I am sure there are other subtleties to this, but this is how it was explained to me by another aircraft owner.

I think the ride programs are very important, but I don't think they should be set up without great forethought and an honest assessment of what actual capabilities a museum has. It's one thing to set up a ride program, pay the bills to get it started, and another to make sure the airplane is flying every weekend to pay the insurance, the pilot has enough hours for insurance requirements, the advertising brings in enough people, the ground operation keeps people safe, etc. I think most museums are smart to set up a ride program, but looking at the program as a reliable revenue stream is less realistic and important than the prestige of having the ride program supporting museum growth.

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REMEMBER THE SERGEANT PILOTS!

bottom line.... Insurance companies are in business to make money.. if they were'nt then they go broke.. lawyers are only the instrument insurance and individuals use to reclaim a loss.. you give a ride (paid or not) and an accident happens.. the insurance company (in this case the life insuance co of the rider) pays out to the spouse/family and then gets their lawyer to go after you/your estate to reclaim as much of the loss as they can because they are in business to make money.. assuming no life insurance then the spouse/family does the same to reclaim their loss.. the rider can wave HIS right to sue but not his spouse/family or insurance co.

it gets better as even if the rider survives but the insurance pays out for hospital expences and the individual and his family don't want to sue and ask the insurace co not to sue, the insurance co will still sue over your objections to reclaim their loss ... happened to my brother-in-law over a boating accident..

sorry folks we did it to ourselfs

JCW: Actually the insurance company doesn't sue over your objections. What happens is, when you get the check from them, you assign your rights (or some of your rights) to sue to the insurance company so that they may collect from other responsible parties. If I hit your car int he parking lot, your insurance company fixes your car and then as part of that settlement gets the right to come and sue me.

On the L-5 rides, some helicopter operators (and some others) are getting out of the "ride" business and getting into buying flight instruction or an "orientation" flight. That saves them on insurance. If nothing else at least you can get your log book signed. It may or may not be OK with the insurance company, I've never heard of one of them having an accident yet. I'm sure if it happens, they may pay the first claim, but the insurance company will see they NEVER get any coverage again.

I can say after 9/11 the insurance on my turbine AS-350 helicopter went from $21,000 a year (5% of stated hull value) to $56,000 (same hull value; aircraft was worth about 2X the declared hull value) plus a full time professional pilot who had to go to Eurocopter factory school every 6 months (at about $10,000 a trip total cost to me). I bought it with cash, no financing so I didn't need insurance for a "mortgage". Needless to say, the insurance came off, we flew it another 5 years without any problems until the XWIFE took it in the divorce. I did quit flying a lot of the people I took with me on trip and pretty much restricted the passenger list to anyone I shared DNA with.

On my son's Cub, I did insure that and the limit I could get was $1million property and $100k a seat. The agent said there was no way any insurance company was writing more than $100k a seat on light aircraft even if Chuck was flying it. Rate on it is about 2% of hull.

If you think lawyers are bad, you need to really look at the insurance companies. When NationWide isn't on your side anymore since you now have a claim, you need a lawyer.

Mark H

Eric, that's very cool!! You are officially my new best friend!!!

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Don't touch my junk!!