For businesses operating under FAR Part 125, which typically involves large aircraft used for private charters, corporate shuttles, or non-commercial services without fare-paying passengers, having the right insurance is essential. FAR Part 125 operators face unique risks due to the size and capacity of their aircraft, as well as the high-value assets involved.
For owners and operators of large aircraft used for private and non-commercial purposes, Part 125 of the Federal Aviation Regulations (FARs) provides essential operating guidelines. This regulation, overseen by the Federal Aviation Administration (FAA), applies to aircraft with a maximum payload capacity of over 6,000 pounds or seating for 20 or more passengers. Because these operations fall outside typical commercial aviation, securing the right Part 125 insurance is critical for protecting the aircraft owner and addressing liability risks.
This guide will discuss the importance of obtaining the right insurance for Part 125 operations, how to choose an appropriate provider, and provide insight into necessary coverage for these types of operations.
Part 125 operations are unique in that they cover private, large-capacity aircraft operations rather than standard commercial or charter flights. This non-commercial status doesn’t remove risks associated with operation, so the right insurance protects against liabilities related to accidents, third-party injuries, property damage, and potential financial losses. A well-structured Part 125 FAA insurance policy helps ensure financial stability and regulatory compliance, especially considering the larger size and payload of these aircraft.
Given the complex nature of Part 125 operations, aircraft owners need insurance to cover a wide range of risks, from passenger liability to aircraft damage. With the right coverage, aircraft owners can better focus on maintaining operational safety without the burden of uncovered liabilities.
Here’s an outline of the most important insurance coverages every FAR Part 125 business should consider:
Aircraft hull insurance protects against physical damage or loss of the aircraft due to accidents, theft, natural disasters, or other covered incidents. Given the high value of large aircraft, hull insurance is crucial for safeguarding your investment. Coverage options include protection both in the air and on the ground, helping to manage potential repair or replacement costs.
Public liability insurance, also known as third-party liability, covers claims for bodily injury or property damage caused by the aircraft to people or property outside of the aircraft. This insurance is a must for FAR Part 125 operators, as it mitigates financial risk in the event of accidents affecting bystanders, buildings, or other aircraft. It’s legally required and essential for protecting your business from costly liability claims.
Although Part 125 operators may not transport fare-paying passengers, passenger liability insurance is still critical for protecting against claims from individuals onboard. This coverage helps manage the legal and medical costs associated with injuries or fatalities of passengers during flight operations. With large aircraft, ensuring adequate coverage limits is essential for minimizing risk exposure.
Crew member liability insurance provides coverage for claims related to injuries sustained by crew members while on duty. This protection ensures that your business is covered in the event of crew injury claims, and it can supplement or work alongside workers’ compensation coverage to protect your flight team and reduce the risk of costly litigation.
Workers’ compensation insurance is essential for covering injuries that may occur to ground crew, maintenance personnel, and other employees working on or around the aircraft. This coverage includes medical expenses and wage replacement for injured workers and helps ensure compliance with labor laws while demonstrating a commitment to employee safety.
For FAR Part 125 businesses that may occasionally charter or lease aircraft, non-owned aircraft liability coverage provides protection against liability claims for accidents or incidents involving rented or leased planes. This coverage is invaluable for businesses that need operational flexibility without taking on additional risks when using non-owned aircraft.
As with many aviation businesses, FAR Part 125 operations often rely on digital systems for flight planning, maintenance scheduling, and record-keeping. Cyber liability insurance protects against risks related to data breaches, hacking, and cyberattacks, covering costs like data recovery, legal expenses, and potential regulatory fines. This coverage is essential in today’s digital environment to safeguard sensitive data and operational continuity.
Ground risk hull insurance provides coverage for your aircraft when it’s on the ground. Not-in-motion coverage protects against events like fire, vandalism, or weather damage while parked, while in-motion coverage offers protection for incidents occurring during taxiing. This insurance is crucial for FAR Part 125 operators, as it helps manage the risks of maintaining high-value aircraft in varied environments.
Selecting an insurance provider for FAA Part 125 operations requires careful consideration of the unique needs of large aircraft owners. Here are key considerations:
Choose a provider with experience in the aerospace industry and a track record in Part 125 operations. Providers who understand FAA regulations and large aircraft operations can offer better, more customized coverage.
Part 125 operations require flexibility. Work with a provider who can offer tailored policies that cover everything from hull insurance to environmental liability, based on the specific risks associated with your aircraft.
Look for an insurance company with a straightforward claims process and a strong financial standing. This ensures that, in case of a claim, you’ll receive timely support.
A knowledgeable provider will ensure your insurance meets federal aviation administration standards, minimizing risk and ensuring regulatory compliance.
A provider offering safety programs or risk management advice can help reduce operational risks and potentially lower premiums.
Assess Risk Exposure: Determine the specific risks associated with your aircraft, including passenger capacity, typical flight routes, and maintenance needs.
Get Multiple Quotes: Reach out to multiple aviation insurance providers to compare quotes and policies tailored to Part 125 operations.
Understand Coverage Limits and Exclusions: Review policy details to understand coverage scope, limits, and any exclusions that could affect your operations.
Consider Bundling: If you have multiple aircraft or own an aviation business, consider bundling policies to receive potential premium discounts.
Work with an Aviation Insurance Broker: For complex operations, consulting a broker specializing in aviation insurance can simplify the process and help you get optimal coverage.
Ensuring comprehensive insurance coverage is key for FAR Part 125 operators to mitigate risks and protect their business. By securing these essential policies, operators can focus on safe, reliable operations while being prepared for unexpected incidents. Working with a knowledgeable aviation insurance provider can help you create a tailored plan that aligns with regulatory requirements and the unique demands of Part 125 operations.
Private operation doesn’t eliminate risks; Part 125 insurance covers liabilities for accidents, injuries, and property damage, protecting against substantial financial losses.
Part 125 covers large, privately operated aircraft, while Part 135 applies to smaller, commercial charters. Part 125 insurance has specific coverage requirements due to larger aircraft size and capacity.
Yes, if your operation involves fuel or hazardous materials, environmental liability insurance covers cleanup costs and fines for spills or contamination.
Yes, crew member liability or workers’ compensation can cover injuries to pilots, flight attendants, and other crew members, protecting the aircraft owner from lawsuits.
Larger capacity can increase liability exposure, so insurance premiums may be higher to cover potential claims involving a greater number of passengers or larger payloads.
Yes, if you rent or lease additional aircraft, non-owned aircraft liability insurance protects against potential claims if incidents occur while operating those aircraft.
Implementing safety programs, maintaining a strong maintenance record, and training your crew can reduce risks and potentially lower premiums.
Yes, with the rise of digital systems, cyber liability insurance protects your operations from data breaches, which could impact passenger data and operational security.
Yes, it’s essential. Even if you carry passengers infrequently, passenger liability insurance protects you from potential claims in case of accidents or injuries.
Review it annually or whenever you add new aircraft, change routes, or make other operational changes, to ensure coverage meets your needs.
Part 125 operations insurance is essential for large aircraft owners to safeguard against liabilities and meet FAA Part 125 requirements. Choosing the right insurance partner and getting the appropriate coverage, including hull insurance, liability protection, and cyber insurance, ensures the financial stability and safety of your operations. A carefully crafted Part 125 insurance policy not only protects your assets but also helps you stay compliant with federal aviation administration regulations, so you can focus on safe and efficient flight operations.
