November 22, 2021
Choosing the Best Insurance for Your Business Jet
Owning a Private Jet Comes with Multiple Insurance Requirements
Aircraft insurance isn’t optional - but you do have a choice of where to purchase it. It’s up to you, the business jet owner - to determine where to buy, how much coverage is necessary, and which company gives you the best rates.
If you fail to insure your aircraft, you could be banned from using fixed-base operators (FBOs) at your take-off and destination airports, barring you from flying and denying you landing permits. That’s why it’s vital to purchase the best possible insurance policies for your used private jet. Otherwise, you might be stuck with a jet card instead of flying when business demands it.
Types of Used Private Jet Insurance Policies
When we talk about aircraft insurance, we’re talking about multiple insurance policies, including:
Hull insurance, which covers physical damage to any part of the aircraft
Liability insurance, which covers legal liability for property damage and injury resulting from aircraft operation
International liability coverage, for flying internationally
Hangar insurance, to cover the plane while its stored in the hangar
In-flight insurance, which covers damage to the aircraft as a result to events that occur while in the air
Passenger liability insurance, which covers any harm that may come to passengers on your business jet
Combined single limit, a combination of public liability and passenger liability insurance
Workers’ compensation insurance, if you employ your own crew members
There are, of course, other aircraft-related insurance policies you may need to purchase, but the main point is that you must do your due diligence to identify the policies you need and to find coverage that works with your budget and the law.
Do I Need to Carry Proof of Insurance in My Business Jet?
Just as you’d carry your proof of insurance while you drive a vehicle, you must also have proof to operate your used private jet.
Any aviation operations manager knows that certificates of insurance must be carried on the aircraft at all times. The proof of insurance documents should show that your insurance policies meet all the legal requirements for your aircraft’s size and category, the equipment aboard, and the flight you take.
How Much Do Aircraft Insurance Policies Cost Private Jet Owners?
The cost of your insurance premiums will vary depending on the type of business jet you own and the coverages your insurance policies provide.
You can safely estimate very small aircraft cost less than $2,000 per year to insure. However, heavy jets will cost much more. Be sure to compare premiums from multiple aircraft insurance carriers before purchasing a policy.
Remember that having a bare-minimum policy, while technically meeting all legal obligations, may be inadequate in the event of an accident or damage. If your insurance payout doesn’t cover the repairs, you’ll be left to pay the balance.
If you have to make any claims to your insurance, your premium will likely rise, depending on why you filed the claim. For example, if your damage was caused by “an act of god,” like a lightning strike, your insurance company may not raise your rates. However, if the damage occurred at the fault of you or your crew, your premiums will likely increase.
How Can I Save Money on Business Jet Insurance Premiums?
The best way to keep your insurance costs as low as possible is to never need to file a claim. However, this isn’t always possible, especially when so many things out of your control can cause damage to your aircraft.
However, using a hangar to store your used private jet, ensuring your pilots complete training, and increasing your flight hours can lower your premiums.
When you park your business jet in a hangar, you reduce the risk of it sustaining damage. The hangar protects your plane from weather-related damage.
Annual pilot proficiency training may be required to retain insurance coverage. Training is proven to reduce the risk of accidents.
Although it sounds counterintuitive, the more hours you fly, the less your insurance premium will be. Flying more than 5,000 hours per year can reduce your risk of a crash by as much as 50 percent.
Best Practice: Review Your Insurance Policies Every Year
If you’re a first time buyer of a pre-owned jet for sale, then you may not realize how much oversight is needed to keep your aviation operations department running smoothly.
One important thing to remember is that your aviation operations manager should be reviewing your existing insurance policies every calendar year. They should be checking for:
Coverages that extend to all facets of your aircraft, including any upgrades made recently
Coverage of all pilots who may operate your business jet
Cost of deductibles
Exclusions that would limit the use of your jet
Ready to Own a Private Jet? Shop on AircraftExchange.com
Shopping for insurance policies is stressful, but buying a private jet for sale doesn’t have to be. When you use the shopping tools on AircraftExchange.com, the exclusive listing website for the International Aircraft Dealers Association (IADA), you can quickly locate pre-owned jets for sale that meet your specific criteria, track sales, and get in contact with reputable aircraft dealers who have earned accreditation through IADA.