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Aviation/Manufacturers
This page is part of the broader Aviation Insurance Guide, which helps aviation businesses understand different insurance coverages. This coverage is particularly relevant for manufacturers, and it complements other important policies like Workers' Compensation and Aviation Products Manufacturing Insurance.
Aviation/Manufacturers
Product liability insurance is an essential coverage for aviation manufacturers because it helps protect them from financial losses arising from claims related to defects, design flaws, or malfunctions in their products. However, a complete insurance program for aviation manufacturers usually includes several other coverages to support comprehensive risk management across their operations.
Aviation General Liability (AGL): This coverage helps protect against bodily injury or property damage caused by the general day-to-day operations of the aviation business, such as premises liability, operations liability, and some contractual exposures. It goes beyond product liability to address a broader range of third-party claims.
Aviation Products Liability: This coverage focuses on liabilities related specifically to aviation products you manufacture, distribute, or sell. It can help cover damages arising from defective parts, systems, or equipment installed in aircraft, including claims that occur after the product has left your premises.
Aviation Hangarkeepers Liability: This coverage is important for manufacturers and service providers who operate hangars or provide storage, maintenance, or repair services for aircraft. It helps protect against liability for damage to third-party aircraft or property while in the insured's care, custody, or control, whether the aircraft is being stored, serviced, or moved.
Aviation Hull Insurance: This coverage applies to aircraft owners, operators, and in some cases manufacturers that own or demo aircraft. It helps protect against physical damage to the aircraft itself, including repair or replacement costs due to covered causes such as accidents, collisions, weather events, theft, or other specified perils.
Business Interruption Insurance: If a covered loss forces a temporary shutdown or slowdown of your aviation manufacturing operations, this coverage can help replace lost income and pay ongoing expenses such as payroll and rent. It is designed to support business continuity and a smoother recovery after a significant insured event.
Cyber Liability Insurance: With the growing digitization of design, production, and aircraft systems, cyber risk is a key exposure for aviation manufacturers. Cyber liability insurance can help cover costs related to data breaches, ransomware, system disruptions, and other cyber incidents, including notification expenses, forensic investigations, and certain third-party claims.
Employment Practices Liability Insurance (EPLI): This coverage helps protect the company and its leadership against claims related to employment practices, such as discrimination, wrongful termination, harassment, retaliation, or failure to promote. EPLI can help cover defense costs and certain settlements or judgments, subject to policy terms.
Environmental Liability Insurance: Aviation manufacturing and maintenance can involve chemicals, fuels, and other materials that pose environmental risks. Environmental liability coverage helps protect against certain liabilities arising from pollution events, contamination, and related cleanup costs, as defined in the policy.
Workers' Compensation Insurance: Workers' compensation is a core coverage for aviation manufacturers, helping cover medical expenses and a portion of lost wages for employees who are injured or become ill in the course of their employment. It may also include coverage for rehabilitation services, subject to state law and policy terms.
Frequently Asked Questions
What types of aviation businesses need manufacturers insurance?
Aviation manufacturers insurance is typically needed by companies that design, build, assemble, or supply parts for aircraft, drones, avionics, engines, and related systems. It can also be important for machine shops and subcontractors that produce components used in aviation applications.
Is aviation products liability different from standard product liability insurance?
Yes. Aviation products liability is tailored to the unique risks of aircraft and aviation components, including strict safety standards and potentially severe loss scenarios. It is usually written by specialty aviation insurers and may offer broader or more specific coverage than a general product liability policy.
Does aviation manufacturers insurance cover testing and flight demonstrations?
Coverage for testing, flight demonstrations, and prototype use depends on the policy. Some policies include these activities, while others require specific endorsements or separate hull and liability coverages. It is important to review your operations with an aviation-focused insurance professional.
Are international sales and exports covered under aviation manufacturers policies?
Many aviation manufacturers policies can include coverage for international sales, but terms vary by insurer and destination country. You may need to disclose where your products are used and obtain appropriate limits and territorial coverage.
How often should an aviation manufacturer review its insurance program?
Most aviation manufacturers review their insurance annually, or whenever they add new products, expand facilities, enter new contracts, or change operations. Regular reviews help ensure that limits, coverages, and endorsements keep pace with the company’s risk profile.
Still have questions? Talk to a local insurance expert.