Ron, I don't think that there will be any Strut based flying events this year or the future if you read into and understand the full implications of the announcement - 1st Mar: Insurance and Liability Review - regarding 3rd part passenger flying, top of the LAA website front page.
If the board decides not to support contingency insurance at all events where 3rd party flying takes place, then this WILL include Strut fly-ins because they will be an LAA event as far as the legal beagles are concerned and this puts the LAA at risk, the reason being that if the Association were to suffer too many punitive claims then insurers could say we were too great a risk and perhaps not then cover us for the core activity, engineering and permitting home built and other light aircraft.
It's a huge problem and it needs input to the Board giving recommendations for their consideration before the mtg on 24th March.
We at Devon Strut have done that and just submitted a position paper.
Sincere regards,
Jim.
LAA events
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Brian Hope
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Hi Jim, please stick to the facts as presented at the Feb 26th meeting rather than spread unnecessary alarm.
Strut fly-ins are not at risk, they can, and I hope will, go on pretty much as they have for decades.
What is under discussion, and no decision has yet been taken, are events where people (who generally are, but do not have to be, youngsters) are invited to an event to receive a flight in a light aircraft. We are, in effect, talking about Young Aviators and Scout Camp events but it would also mean events like Fly a Teacher, or Come and meet the LAA were such events still being organised.
If you are at a fly-in and somebody asks you to take them flying you are perfectly at liberty to do so, just as you always have been. The Strut or LAA did not invite that person to come and take a flight.
There is no intention of removing the insurance cover from Struts who organise Fly-ins, that will continue as before.
And with the greatest respect Jim, the Devon paper merely states the Strut's displeasure and concern, it does not offer a single proposal of how we solve the liability problem at YA (more correctly organised passenger carrying) events.
Strut fly-ins are not at risk, they can, and I hope will, go on pretty much as they have for decades.
What is under discussion, and no decision has yet been taken, are events where people (who generally are, but do not have to be, youngsters) are invited to an event to receive a flight in a light aircraft. We are, in effect, talking about Young Aviators and Scout Camp events but it would also mean events like Fly a Teacher, or Come and meet the LAA were such events still being organised.
If you are at a fly-in and somebody asks you to take them flying you are perfectly at liberty to do so, just as you always have been. The Strut or LAA did not invite that person to come and take a flight.
There is no intention of removing the insurance cover from Struts who organise Fly-ins, that will continue as before.
And with the greatest respect Jim, the Devon paper merely states the Strut's displeasure and concern, it does not offer a single proposal of how we solve the liability problem at YA (more correctly organised passenger carrying) events.
There does not appear to be an LAA solution acceptable to the board, or I am confident they would have found it.
The problem is basically the LAA does not have the resources to accept the risk. The fact the Scout Association can accept the risk is based on their huge size, since they self-insure, and offset unexpected peaks in the claims through reinsurance. So scout flying could proceed through them, but only if the organisers have no connection with the LAA. Just one slip with publicity and it would be hard to pretend the organisers had no connection with the LAA.
Even if the LAA chose to pay the massive £14,000 demanded, ongoing premium increases in the event of a claim would be substantial. That could also apply to a Strut-organised fly-in. Indeed, since two-seaters are often insured for quite low passenger liability sums, according to HQ info, the likelihood of the LAA contingent insurance being called on is considerable.
We hear a lot about what the BGA does - what do they do for their public flying? How do they address the risks to their association?
Would a per-flight insurance work - like the ones you could purchase for your flight years ago, or a Junior membership maybe? That might then be covered on the member to member section of the public liability.
Would the LAA ET still help with costs of non-LAA flying events if there were no mention made of the LAA? The Trust can only exist if it is substantially for the benefit of the public.
We're pretty bad already at representing ourselves to the public, being seen as a privileged minority buzzing around without a care for anyone else. This will just reinforce that view. When does the LAA promote itself to the general public, as opposed to air-minded individuals?
The problem is basically the LAA does not have the resources to accept the risk. The fact the Scout Association can accept the risk is based on their huge size, since they self-insure, and offset unexpected peaks in the claims through reinsurance. So scout flying could proceed through them, but only if the organisers have no connection with the LAA. Just one slip with publicity and it would be hard to pretend the organisers had no connection with the LAA.
Even if the LAA chose to pay the massive £14,000 demanded, ongoing premium increases in the event of a claim would be substantial. That could also apply to a Strut-organised fly-in. Indeed, since two-seaters are often insured for quite low passenger liability sums, according to HQ info, the likelihood of the LAA contingent insurance being called on is considerable.
We hear a lot about what the BGA does - what do they do for their public flying? How do they address the risks to their association?
Would a per-flight insurance work - like the ones you could purchase for your flight years ago, or a Junior membership maybe? That might then be covered on the member to member section of the public liability.
Would the LAA ET still help with costs of non-LAA flying events if there were no mention made of the LAA? The Trust can only exist if it is substantially for the benefit of the public.
We're pretty bad already at representing ourselves to the public, being seen as a privileged minority buzzing around without a care for anyone else. This will just reinforce that view. When does the LAA promote itself to the general public, as opposed to air-minded individuals?
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That's probably the problem Brian, I have stuck to the facts. It's just that I have extended them to encompass the very great possibility that Strut flying events as we know them will disappear if the Board and LAA members can't find a solution to the insurance problem.
As one member was heard to say during the meeting, "This could be the end of Struts."
As I understand it we were told that the premium for third party flying contingency risks would rise from £7000 to £14000 this year and that even if we could afford that increased amount it was likely, we were told, that over the years it would increase even more, to the point where, should our insurers have to pay out several large sums, then they might in the end decline cover.
If you follow that train of thought then the only apparent way we can mitigate or decrease our exposure is to make the LAA a more attractive proposition to the insurers by decreasing the (perceived?) risk. i.e., remove all LAA sponsored flying events. If the Association can’t afford, both financially and commercially, to cover all its present activities, then this has got to be a future consideration.
As Peter Harvey said, our first priority is to protect engineering services and the Permit to Fly system. Fine, that covers all the builders and permit owning members. Where does it leave the rest of the membership? So, to the future. No flying events, little or no publicity, declining enthusiast membership, higher engineering and permit costs and soon, I expect, there will be a scale of inspection charges.
This can't be allowed to happen, we are an Association for the members, not CAA Lite.
I am not alone about being extremely concerned about this turn of events and not knowing the answer immediately. Obviously the Board doesn't, otherwise it would not have held the meeting and others have expressed both in writing and verbally that they just do not know what the solution is. All sorts of ideas are flying around - 3rd parties pay an insurance "surcharge". Easy for organised events such as Young Aviators and Scout camps, in fact already done in Devon when flying school children, they pay for a top up to £5m. But not so easy if adults are invited. OK, one can take a passenger for a flight under the privileges of your licence but as sure as eggs is eggs, the LAA are going to be mentioned somewhere along the line - it's (probably) an LAA permitted aircraft after all, so it's probable that there won’t be an escape from the 'no win, no fee' brigade. Another idea is, for those members that want to sustain the interest of our future members, for individual pilots to carry additional insurance, certainly up to £4m. This may add approximately £250 to an average policy. Another idea is to carry out all youth flying under the LAAET banner but how tenuous a link is that in the legal world? I certainly don’t know the answer.
As Dave Hall says, how do the BGA do it?; how does the Air League do it?; how does the BMFA do it? We know how the Scouting Association does it – self insure with top-up or re-insurance cover.
The LAA has already lobbied an MP about the Risk Adverse Society and indeed, as you know, we are attending a parliamentary lobbying session at Westminster on the 28th March and this matter will be discussed again resolutely, but this won’t change matters overnight.
So, it’s thinking caps on for every member to find a solution to keep the LAA and it’s flying activities, as near as possible, as they are.
Jim.
As one member was heard to say during the meeting, "This could be the end of Struts."
As I understand it we were told that the premium for third party flying contingency risks would rise from £7000 to £14000 this year and that even if we could afford that increased amount it was likely, we were told, that over the years it would increase even more, to the point where, should our insurers have to pay out several large sums, then they might in the end decline cover.
If you follow that train of thought then the only apparent way we can mitigate or decrease our exposure is to make the LAA a more attractive proposition to the insurers by decreasing the (perceived?) risk. i.e., remove all LAA sponsored flying events. If the Association can’t afford, both financially and commercially, to cover all its present activities, then this has got to be a future consideration.
As Peter Harvey said, our first priority is to protect engineering services and the Permit to Fly system. Fine, that covers all the builders and permit owning members. Where does it leave the rest of the membership? So, to the future. No flying events, little or no publicity, declining enthusiast membership, higher engineering and permit costs and soon, I expect, there will be a scale of inspection charges.
This can't be allowed to happen, we are an Association for the members, not CAA Lite.
I am not alone about being extremely concerned about this turn of events and not knowing the answer immediately. Obviously the Board doesn't, otherwise it would not have held the meeting and others have expressed both in writing and verbally that they just do not know what the solution is. All sorts of ideas are flying around - 3rd parties pay an insurance "surcharge". Easy for organised events such as Young Aviators and Scout camps, in fact already done in Devon when flying school children, they pay for a top up to £5m. But not so easy if adults are invited. OK, one can take a passenger for a flight under the privileges of your licence but as sure as eggs is eggs, the LAA are going to be mentioned somewhere along the line - it's (probably) an LAA permitted aircraft after all, so it's probable that there won’t be an escape from the 'no win, no fee' brigade. Another idea is, for those members that want to sustain the interest of our future members, for individual pilots to carry additional insurance, certainly up to £4m. This may add approximately £250 to an average policy. Another idea is to carry out all youth flying under the LAAET banner but how tenuous a link is that in the legal world? I certainly don’t know the answer.
As Dave Hall says, how do the BGA do it?; how does the Air League do it?; how does the BMFA do it? We know how the Scouting Association does it – self insure with top-up or re-insurance cover.
The LAA has already lobbied an MP about the Risk Adverse Society and indeed, as you know, we are attending a parliamentary lobbying session at Westminster on the 28th March and this matter will be discussed again resolutely, but this won’t change matters overnight.
So, it’s thinking caps on for every member to find a solution to keep the LAA and it’s flying activities, as near as possible, as they are.
Jim.
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Brian Hope
- Posts: 1271
- Joined: Tue Jan 08, 2008 8:28 pm
- Location: Sheerness Kent
The BMAA does not hold YA or organised passenger flying events, which is how they get over it. Neither do BGA, their trial flight arrangements are commercial activities by gliding clubs, the same as you might do at your local flying club, and nothing to do with BGA the Association.
Personally I do not think it has a great deal to do with the cost of the current premium either; but it has everything to do with the type of no win no fee claim culture that makes it possible for the legal profession to pick off the insurance companies with often frivolous claims that, even if dropped by the no win no fee brigade when it becomes clear they have a difficult fight on their hands, will still have cost the insurer (and hence the Association in our case) a considerable amount of money. Eventually you face the possibility of not being able to afford insurance, or worse, nobody will insure you, yet you have never been proved to have done anything wrong and have not even had your day in court.
We have to take that risk with every LAA aircraft that flies, but we have a strong approval and airworthiness regime to fend off those attacks. Is it right that we continue to take that risk to fly a few hundred kids each year, at events that are being run by a fair number of non LAA member Strut members and are often being flown by non members in non LAA aircraft? Personally I'm afraid I hold the view that it is our aircraft owning members who have to take precedence here, they and their families have significant sums of money and time invested in their aircraft and we owe it to them to do all we can to safeguard their investment by protecting our core engineering business.
Is ET an option to take on the role of running YA, not as it currently exists, and anyway how do you rationalise that, even if some legal and Association safeguarded arrangement can be provided, you are effectively using it as a sacrificial lamb should something go horribly wrong?
I’m afraid we live in the society we live in, not the one we would want to live in. Just take a look at the types of events you may have attended as a kid but that now hardly exist – carnivals, adventure weekends, county fairs, street parties and so much more. And why don’t they exist any more? – liability and over regulation based on the fear of liability. The Association is unfortunately, not immune for these problems.
On the subject of passenger cover, the legal minimum cover is 100K SDR’s, about £80K per passenger seat. That is a ridiculously small amount of money when a typical claim for passenger injury can be £2.5M. Fortunately most brokers will not sell you third party cover with separate minimum passenger cover, they will sell you a Combined Single Limit policy that covers third party claims and passenger claims up to the limit of the premium – around £2M for legal minimum two seat cover, £4M four seat minimum cover.
However, it is not unheard of that insurance companies will try to tempt new customers with bargain price premiums that are not CSL, in which case you have negligible passenger cover POSSIBLY WITHOUT REALISING IT. There is a company at this very minute doing this, so if you are offered a ‘good deal’ please check that you have CSL. And if you choose to fly with the minimum passenger requirement then maybe you should explain to the missus and kids that in the event of successful passenger claim you will probably face financial ruin for the rest of your life. Not a very good trade off for saving a few hundred quid a year additional premium is it? If you need to save the money, do not insure the passenger seat(s) and do not take passengers flying.
Personally I do not think it has a great deal to do with the cost of the current premium either; but it has everything to do with the type of no win no fee claim culture that makes it possible for the legal profession to pick off the insurance companies with often frivolous claims that, even if dropped by the no win no fee brigade when it becomes clear they have a difficult fight on their hands, will still have cost the insurer (and hence the Association in our case) a considerable amount of money. Eventually you face the possibility of not being able to afford insurance, or worse, nobody will insure you, yet you have never been proved to have done anything wrong and have not even had your day in court.
We have to take that risk with every LAA aircraft that flies, but we have a strong approval and airworthiness regime to fend off those attacks. Is it right that we continue to take that risk to fly a few hundred kids each year, at events that are being run by a fair number of non LAA member Strut members and are often being flown by non members in non LAA aircraft? Personally I'm afraid I hold the view that it is our aircraft owning members who have to take precedence here, they and their families have significant sums of money and time invested in their aircraft and we owe it to them to do all we can to safeguard their investment by protecting our core engineering business.
Is ET an option to take on the role of running YA, not as it currently exists, and anyway how do you rationalise that, even if some legal and Association safeguarded arrangement can be provided, you are effectively using it as a sacrificial lamb should something go horribly wrong?
I’m afraid we live in the society we live in, not the one we would want to live in. Just take a look at the types of events you may have attended as a kid but that now hardly exist – carnivals, adventure weekends, county fairs, street parties and so much more. And why don’t they exist any more? – liability and over regulation based on the fear of liability. The Association is unfortunately, not immune for these problems.
On the subject of passenger cover, the legal minimum cover is 100K SDR’s, about £80K per passenger seat. That is a ridiculously small amount of money when a typical claim for passenger injury can be £2.5M. Fortunately most brokers will not sell you third party cover with separate minimum passenger cover, they will sell you a Combined Single Limit policy that covers third party claims and passenger claims up to the limit of the premium – around £2M for legal minimum two seat cover, £4M four seat minimum cover.
However, it is not unheard of that insurance companies will try to tempt new customers with bargain price premiums that are not CSL, in which case you have negligible passenger cover POSSIBLY WITHOUT REALISING IT. There is a company at this very minute doing this, so if you are offered a ‘good deal’ please check that you have CSL. And if you choose to fly with the minimum passenger requirement then maybe you should explain to the missus and kids that in the event of successful passenger claim you will probably face financial ruin for the rest of your life. Not a very good trade off for saving a few hundred quid a year additional premium is it? If you need to save the money, do not insure the passenger seat(s) and do not take passengers flying.
The BGA told us about a Junior membership scheme at the first Youth Aviation Education Conference, and that it gave reduced cost gliding. Maybe that's changed since.
As far as ET is concerned, it was set up mainly to address the youth education aspects of flying, and receive charitable donations, though it also now includes heritage and training (for LAA members only at the moment). Neither of these last two represents a significant public benefit, and if youth aviation were to be catered for separately outside of the LAA, I think the charity might be in difficulties with the Charity Commissioners anyway.
Just a thought - could payment of the insurance costs for charitable flying activities through LAAET represent a tax-benefit? If members donated an avearge of £5 to the LAAET with Gift-aid, the government would add £10,000 to its funds - almost enough to cover the insurance! The donation itself could cover improved training and heritage facilities, Rally set-up costs etc with some to spare. Maybe we could set up some sort of 'stewardship' initiative.
Only about 1/4 of the membership have permit aircraft. Another 1/5 just belong because they want to be associated with LAA even though they own CofA aircraft. The majority just love aircraft but don't own/fly one.
Maybe it's engineering that should be separated from the rest of the LAA. After all, it represents a proven financial risk to the LAA, whereas I don't recall being told of any insurance claims for YA and other flying events, and I rather suspect if there had been any, it would have formed a key part of the argument for stopping them.
I really hope we can sort something out - we still suffer from the effects of the BMAA split, and can't afford to lose a further chunk of members.
Meanwhile, for a bit of inspiration, take a look at this video. Could this be the face of things to come?
http://www.youtube.com/watch?v=GCeVsGHE8X0
As far as ET is concerned, it was set up mainly to address the youth education aspects of flying, and receive charitable donations, though it also now includes heritage and training (for LAA members only at the moment). Neither of these last two represents a significant public benefit, and if youth aviation were to be catered for separately outside of the LAA, I think the charity might be in difficulties with the Charity Commissioners anyway.
Just a thought - could payment of the insurance costs for charitable flying activities through LAAET represent a tax-benefit? If members donated an avearge of £5 to the LAAET with Gift-aid, the government would add £10,000 to its funds - almost enough to cover the insurance! The donation itself could cover improved training and heritage facilities, Rally set-up costs etc with some to spare. Maybe we could set up some sort of 'stewardship' initiative.
Only about 1/4 of the membership have permit aircraft. Another 1/5 just belong because they want to be associated with LAA even though they own CofA aircraft. The majority just love aircraft but don't own/fly one.
Maybe it's engineering that should be separated from the rest of the LAA. After all, it represents a proven financial risk to the LAA, whereas I don't recall being told of any insurance claims for YA and other flying events, and I rather suspect if there had been any, it would have formed a key part of the argument for stopping them.
I really hope we can sort something out - we still suffer from the effects of the BMAA split, and can't afford to lose a further chunk of members.
Meanwhile, for a bit of inspiration, take a look at this video. Could this be the face of things to come?
http://www.youtube.com/watch?v=GCeVsGHE8X0
032505
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Brian Hope
- Posts: 1271
- Joined: Tue Jan 08, 2008 8:28 pm
- Location: Sheerness Kent
Hi Brian, With the exception of the odd rare example of punative damages against a wealthy company are you really confident in your statement " ......£80K per passenger seat. That is a ridiculously small amount of money when a typical claim for passenger injury can be £2.5M ".
I say this as having some involvement with a serious car passenger injury case I have heard from a barrister that the £80k is usually generous in reality else car insurance would perhaps be unaffordable.
I only ask because I sometimes find myths presented as facts which the man on the Clapham Omnibus would not recognise but which nevertheless stop them enjoying life.
I say this as having some involvement with a serious car passenger injury case I have heard from a barrister that the £80k is usually generous in reality else car insurance would perhaps be unaffordable.
I only ask because I sometimes find myths presented as facts which the man on the Clapham Omnibus would not recognise but which nevertheless stop them enjoying life.
roger breckell
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Brian Hope
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- Joined: Tue Jan 08, 2008 8:28 pm
- Location: Sheerness Kent
Hi Merlin, other than having to pay car insurance I know little about it, but I am pretty sure the passenger cover will be substantially more than £80K per seat.
If a passenger is maimed or brain damaged and requires specialist help for the rest of their life, where is £80K going to get you? I know somebody who was injured in a car accident and is in that position and he was awarded in excess of £3M over ten years ago.
Thankfully this type of accident is quite rare, but would you be satisfied with minimal cover because the odds are in your favour of you not having such an accident?
If a passenger is maimed or brain damaged and requires specialist help for the rest of their life, where is £80K going to get you? I know somebody who was injured in a car accident and is in that position and he was awarded in excess of £3M over ten years ago.
Thankfully this type of accident is quite rare, but would you be satisfied with minimal cover because the odds are in your favour of you not having such an accident?
The Civil Aviation (Insurance) Regulations 2005 sets out the minimum level of passenger liability insurance at 100,000 SDR's per passenger. An SDR is made up of a basket of four international currencies and the value against the pound sterling fluctuates as the underlying currencies change. At the moment an SDR is worth about £1.02.merlin wrote:I have heard from a barrister that the £80k is usually generous
For a two seat aircraft, therefore, the minimum legal passenger liability cover is a little over £100,000. You should be under no illusion that this is an adequate amount if you wish to protect your lifestyle and that of your family.
As someone who has spent most of a working lifetime involved in liability insurance, I can tell you that it is not inadequate and for a serious injury to your passenger would not even start to cover the legal bills much less any damages which might be awarded.
Damages and court costs continue to rise but even twenty years ago an indemnity limit of £100,000 would have been considered imprudent. I would even go as far as to say that any insurance broker who allowed his client to accept the minimum level without warning of the consequences would probably be laying themselves open to being sued for professional negligence if the worst were to happen.
Brian, thanks for the correction on non-LAA members doing training courses. I'm glad to hear that is happening and I should take the opportunity of congratulating you on the success of these courses.
Quite by chance (honestly!) I happened to see some interesting statistics on the EAA Young Eagles and the very significant effect the program is having on the choice of a piloting career. They reckon pilots under 35 who were Young Eagles are 5.4 times as likely to obtain a pilot certificate than youngsters of the same age who weren't Young Eagles.
EAA Chairman Tom Poberezny is interviewed about this unintended spin-off of the Young Eagles scheme. He makes some very positive points about the value to the EAA of the YE program.
http://www.eaavideo.org/video.aspx?v=812738325001
Are we going to turn our backs on this positive benefit to the future existence of the LAA?
Quite by chance (honestly!) I happened to see some interesting statistics on the EAA Young Eagles and the very significant effect the program is having on the choice of a piloting career. They reckon pilots under 35 who were Young Eagles are 5.4 times as likely to obtain a pilot certificate than youngsters of the same age who weren't Young Eagles.
EAA Chairman Tom Poberezny is interviewed about this unintended spin-off of the Young Eagles scheme. He makes some very positive points about the value to the EAA of the YE program.
http://www.eaavideo.org/video.aspx?v=812738325001
Are we going to turn our backs on this positive benefit to the future existence of the LAA?
032505
'As I understand it we were told that the premium for third party flying contingency risks would rise from £7000 to £14000 this year and that even if we could afford that increased amount it was likely, we were told, that over the years it would increase even more, to the point where, should our insurers have to pay out several large sums, then they might in the end decline cover.'
Is this brouhaha really just about a doubling of insurance premium and whether 'we can afford' !!! This is an organisation turning over the thick end of £1Mpa and surely an unbudgeted 7K whilst undesireable is within the margins of error. I assume that the level of insurance this provides will adequately protect the Association and its Directors We must have spent in xs of 7K in staff/member time, fuel and general angst. Bite the bullet, pay the premium, organise the events, make the active members happy and cross the bridge of further increases if and when they happen. A premium increasing event is big impact low probablity - true of many events in life
Malcolm Rogan
Is this brouhaha really just about a doubling of insurance premium and whether 'we can afford' !!! This is an organisation turning over the thick end of £1Mpa and surely an unbudgeted 7K whilst undesireable is within the margins of error. I assume that the level of insurance this provides will adequately protect the Association and its Directors We must have spent in xs of 7K in staff/member time, fuel and general angst. Bite the bullet, pay the premium, organise the events, make the active members happy and cross the bridge of further increases if and when they happen. A premium increasing event is big impact low probablity - true of many events in life
Malcolm Rogan
Malcolm Rogan
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