Third-party insurance is a liability coverage that is acquired by a consumer (first party) from an insurance company (second party) to protect against claims from other people (third party) for injuries or damage the first party causes.
Most often, third – party insurance comes bundled into standard homeowners, renters and many business policies and is required as part of your car insurance in every state in the country.
However, risk is everywhere, and if you manage to cause bodily injury or damage to a third party or their property, you could be on the hook for some serious damages, and there is the chance that a lawsuit might follow. Litigation is quite common these days.
If you are on the wrong end of a lawsuit, you’ll be looking at some serious expenses for both legal defense and any resulting judgments or settlements.
Skydiving is an exciting hobby enjoyed by millions of people. Every pastime has its own unique share of risks which come with the thrills. If you are a skydiver, you may be wondering how to get the right type of insurance to protect yourself and your family.
Skydiving and third party liability insurance may seem like a tough combination of topics, but you may find that it is easier than you think to get this specialized form of coverage.
In the United States and all around the world, Skydiving accidents happen. It can occur due to faulty equipment, instructor error, user error, hazardous conditions, or inclement weather. The USPA estimates that about 350,000 people complete more than 3 million jumps in a typical year.
During freefall, the wind travelling past your ears is well over 100 mph. This much makes you deaf to all sounds – you cannot hear a fellow skydiver, and reports have it that there were approximately 2,129 injuries in the U.S. in 2016 alone. So whether you are an instructor, business owner, club, stunt diver, or an individual with the love for blue skies, you will need to seek protection with adequate third – party liability insurance coverage.
Have it in mind that not all insurance policies cover third party liability claims unless you actively select them when you buy your policy.
In the United States, some policies even exclude third party claims. One insurance plan that requires you to acquire extra third party liability coverage is employment practices liability insurance, which covers claims filed against the business by employees, not customers.
Note that by adding this coverage, the business will be protected against claims made by customers too. Before you acquire any insurance policy as a skydiver or a skydiving business, make sure you read the fine print so you know what is covered.
Have it in mind that most insurance policies contain specific exclusions, even for some situations commonly covered by other companies. In addition, do not assume you know what your policy covers just because you’ve had the same type of plan before.
How Much Does a Third Party Liability Insurance Cost for Skydivers?
Additionally, skydivers will have to pay a standard premium based on how they are rated, plus an additional cost called a “flat extra fee.” This fee is an extra charge for what insurance companies call a “dangerous hobby.” Skydiving actually has one of the lowest flat extra fees on average, however.
Note that the cost you pay will rest on whether the insurance company considers you a recreational skydiver (performing 50 jumps or less per year). For recreational skydivers, the flat extra fee will usually cost an additional $3.00 to $4.50 per thousand dollars of third party insurance coverage. This amount increases as the number of jumps increases.
Also note that the additional cost may be anywhere from $5.50 per thousand dollars of coverage for over 50 jumps, and up to $8.00 per thousand dollars of coverage for over 100 jumps per year. However, rates may also be less expensive if you are member of a skydiving club. Ask your independent agent if you qualify for discounts on your policy.
How to Get Third Party Liability Insurance for Skydiving
For businesses in the skydiving line, you might be required to carry a certain amount of liability insurance coverage in order to run your business and this requirement tend to vary from state to state. So it is imperative to check what it is in your state and the various requirements you ought to meet. Howbeit, here are few steps to consider when you want to acquire third party liability insurance in the United States.
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Start Shopping On Time
You don’t have to wait for the next year or for accidents or for you to gain a little ground before you start considering this insurance. You should give your agent at least 60 days to compare policies and get you the best insurance company possible.
Compare Several Skydiving Insurance Companies at Once
Have it in mind that there is no single best insurance company—what’s right for someone else might not be right for you.
So how do you find the one that fits you? You simply cast a wide net. Don’t just contact one insurance agency, contact multiple ones. Always remember that you can fill out a single form and get immediately connected with three different agents online.
Give Your Agents All the Facts About Your Business
For skydiving company, when talking to an agent, note there are some questions that you have to answer. It is important to be as honest and detailed as possible so he can locate and provide you with a policy that best suits your needs. Information you should have ready:
- The exact size of your inventory
- Information about your aircraft or chutes, including make and model
- What state and federal safety programs and security measures you employ
- Your instructors or coaches qualification files
- The services offered by your business and the amount of revenue each generates
Find the Company’s Credit Rating
Note that after the agent must have analyzed and processed your information, he’ll provide you a specific quote from an insurance company. You should accept or decline the offer based primarily on two things: the price and the reliability of the insurance company.
Get all the info about the company you need
Also note there are some basic questions to ask your insurance company to make sure they can accommodate you or your skydiving business. Some good questions to ask include
- Can I cancel my policy at any time without any fees?
- What kind of repairs do you offer—OEM or otherwise?
- Do you offer combined deductible?
- When can I reach you if issues occur? Do you have 24 – hour claims service?
Get the Best Price
You should also find out which discounts are available. Companies have numerous discounts for individuals or businesses based on safe skydiving practices. Note that you might be able to get a discount if you offer safety manuals and employee handbooks, the skydiving equipment you use or you have security cameras installed on your drop zone.
Use a payment plan that matches your budget
Indeed there are various types of payment plans available, including month – to – month payments, year – to – year payments, and everything in between. However, note that the more you pay upfront and the more spaced out your payments are, the less your overall premium will cost.
You may be surprised to learn that so many insurance companies in the United States provide specialized third party liability insurance for skydivers. Some companies offer special coverage for those who like to parachute, whether you perform a couple of dives per year or if you do it professionally.
However, you have several choices when buying third party insurance for skydivers. You can buy regular skydivers insurance policies that include third party insurance, or you can opt for specialized third party insurance policies.