Are you wondering what type of insurance is best for a skydiving business? If YES, here are 16 insurance policies for a skydiving company.
The nature of skydiving makes it impossible to run the business without insurance. As a matter of fact, no skydiver or even employee would want to patronize or work for a skydiving company if they don’t have some of the basic insurance policy covers in place.
So, if you are looking towards starting a skydiving company, then you should be ready to create a robust budget for different types of insurance policy covers. The fact that you are going to be operating in the aviation industry means that you would need aviation insurance.
Aviation insurance is an insurance coverage geared specifically to the operation of an aircraft. Aviation insurance policies are distinctly different from those for other areas of transportation and tend to incorporate aviation terminology, as well as terminology, limits and clauses specific to aviation insurance.
Having said that, here are some of the different types of insurance policy covers you would need if you want to operate a skydiving company;
Best Insurance Policies for a Skydiving Company
1. Casualty Insurance
Casualty insurance is a problematically defined term which broadly encompasses insurance not directly concerned with life insurance, health insurance, or property insurance. Casualty insurance is mainly liability coverage of an individual or organization for negligent acts or omissions.
However, the term has also been used for property insurance, aviation insurance, boiler and machinery insurance, and glass and crime insurance. It may include marine insurance for shipwrecks or losses at sea, fidelity and surety insurance, earthquake insurance, political risk insurance, terrorism insurance, fidelity and surety bonds.
Interestingly, casualty insurance provides liability coverage in the event that a skydiver instructor is found “at fault” in an accident. This can cover medical expenses of individuals involved in the accident as well as restitution or repair of damaged property, all of which would fall into the realm of casualty insurance coverage.
Although this type of insurance is important, but it is not all skydiving companies that will purchase it for their employees.
Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefit) in exchange for a premium, upon the death of an insured person (often the policy holder).
Depending on the contract, other events such as terminal illness or critical illness can also trigger payment. The policy holder typically pays a premium, either regularly or as one lump sum. Other expenses, such as funeral expenses, can also be included in the benefits.
Modern life insurance bears some similarity to the asset management industry and life insurers have diversified their products into retirement products such as annuities. Please note that life insurance policies are legal contracts and the terms of the contract describe the limitations of the insured events.
3. Ground Risk Hull Insurance Not In Motion
Ground Risk Hull Insurance Not In Motion provides coverage for the insured aircraft against damage when it is on the ground and not in motion. This would provide protection for the aircraft for such events as fire, theft, vandalism, flood, mudslides, animal damage, wind or hailstorms, hangar collapse or for uninsured vehicles or aircraft striking the aircraft.
The amount of coverage may be a blue book value or an agreed value that was set when the policy was purchased. The use of the insurance term “hull” to refer to the insured aircraft betrays the origins of aviation insurance in marine insurance. Most hull insurance includes a deductible to discourage small or nuisance claims.
4. Ground Risk Hull Insurance in Motion (Taxiing)
Ground Risk Hull Insurance in Motion (Taxiing) coverage is similar to ground risk hull insurance not in motion, but provides coverage while the aircraft is taxiing, but not while taking off or landing. Normally, coverage ceases at the start of the take-off roll and is in force only once the aircraft has completed its subsequent landing.
Due to disputes between aircraft owners and insurance companies about whether the accident aircraft was taxiing or attempting to take-off, this type of coverage has been discontinued by many insurance companies.
5. In-Flight Insurance
In-flight coverage protects an insured aircraft against damage during all phases of flight and ground operation, including while parked or stored. Naturally, it is more expensive than not-in-motion coverage, since most aircraft are damaged while in motion. Please note that this form of insurance is only applicable to a skydiving company that own aircrafts and not lease or rent.
6. Public Liability Insurance
Public Liability Insurance coverage which is often referred to as third party liability covers skydiving companies cum aircraft owners for damage that their aircraft does to third party property, such as houses, cars, crops, airport facilities and other aircraft struck in a collision.
It does not provide coverage for damage to the insured aircraft itself or coverage for passengers injured on the insured aircraft.
After an accident, an insurance company will compensate victims for their losses, but if a settlement cannot be reached then the case is usually taken to court to decide liability and the amount of damages. Public liability insurance is mandatory in most countries and is usually purchased in specified total amounts per incident, such as $1,000,000 or $5,000,000.
7. Professional Liability Insurance (PLI)
Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advice – and service – providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.
The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm.
Professional liability insurance may take on different forms and names depending on the profession, especially medical and legal, and is sometimes required under contract by other businesses that are the beneficiaries of the advice or service.
Please note that the coverage for Professional liability insurance (PLI) sometimes provides for the defense costs, including when legal action turns out to be groundless.
Coverage does not include criminal prosecution, nor a wide range of potential liabilities under civil law that are not enumerated in the policy, but which may be subject to other forms of insurance. Professional liability insurance is required by law in some areas for certain kinds of professional practice.
8. Wage Insurance
The fact that you are expected to pay wages as an employer means that you would need wage insurance cover for some of your key employees if you want to continue to keep them in your company. Wage insurance is a form of proposed insurance that would provide workers with compensation if they are forced to move to a job with a lower salary.
The idea is usually proposed as a response to outsourcing and the effects of globalization, although it could equally be proposed as a response to job displacement due to increasingly productive technology (e.g. factories, or computers).
Economic consensus generally holds that in both cases—the integration of the global economy through free trade, on one hand, and greater technological efficiencies, on the other—the changes will have a net benefit across the world.
However, economic theory also indicates that, while people over the aggregate will be better off, many individuals will not be able to keep their current job at their current wages especially the travels and tours industry that skydiving companies falls under.
Those individuals may be able to retrain and move to more highly paid wages, and the reduced cost of goods (which is likely to result from either case under consideration) may offset at least some of the wage loss. These compensating effects are likely to take several years to come about, however, and some people might never be fully compensated by normal market mechanisms. Wage insurance would offer compensation in these situations
Disability insurance for businesses provides income in a situation where a business owner or employee is unable to work due to an illness or injury that occurred away from work. If an illness or injury keeps someone from working for an extended period, disability insurance provides financial assistance to replace a portion of lost income.
This type of coverage is typically available through employer – provided or voluntary employee benefits. Business insurance can also provide disability benefits with a workers’ compensation policy if an employee becomes disabled after a work – related injury or illness.
In the United States, there are so many good reasons to have individual disability insurance to replace your income should you become injured. However, if you own a business, it is not just about you. Note that as a business owner, you are more or less the primary driving force of your business, as well as the bankroll.
10. Business Overhead Expense (BOE) Disability Insurance
Business overhead expense (BOE) disability insurance, also known as Business Expense Insurance, pays the insured’s business overhead expenses if he or she becomes disabled. A BOE policy pays a monthly benefit based on actual expenses, not anticipated profits. It is designed for businesses that rely on a small number of people (or one person) to produce revenue.
11. Group Insurance
Group insurance is an insurance that covers a group of people, for example the members of a society or professional association, or the employees of a particular employer for the purpose of taking insurance.
Group coverage can help reduce the problem of adverse selection by creating a pool of people eligible to purchase insurance who belong to the group for reasons other than the wish to buy insurance, which might be because they are a worse than average risk.
Grouping individuals together allows insurance companies to give lower rates to companies, “Providing large volume of business to insurance companies gives us greater bargaining power for clients, resulting in cheaper group rates. One major feature which is sometimes common in group insurance is that the premium cost on an individual basis is not individually risk – based. Instead it is the same amount for all the insured persons in the group.
Workers’ compensation or workers’ comp (formerly workmen’s compensation until the name was changed to make it gender – neutral) is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence.
The trade – off between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain”.
One of the problems that the compensation bargain solved is the problem of employers becoming insolvent as a result of high damage awards. The system of collective liability was created to prevent that, and thus to ensure security of compensation to the workers. Individual immunity is the necessary corollary to collective liability.
Despite the fact that when it comes to workers’ compensation insurance, plans differ among jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment.
Please note that general damage for pain and suffering, and punitive damages for employer negligence, are generally not available in workers’ compensation plans, and negligence is generally not an issue in the case.
13. Health Insurance
Health insurance is an insurance that covers the whole or a part of the risk of a person incurring medical expenses, spreading the risk over numerous persons.
By estimating the overall risk of health risk and health system expenses over the risk pool, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to provide the money to pay for the healthcare benefits specified in the insurance agreement.
The benefit is administered by a central organization such as a government agency, private business, or not – for – profit entity. According to the Health Insurance Association of America, health insurance is defined as “coverage that provides for the payments of benefits as a result of sickness or injury. It includes insurance for losses from accident, medical expense, disability, or accidental death and dismemberment”
Liability insurance which is also known as third – party insurance is a part of the general insurance system of risk financing to protect the purchaser (the “insured”) from the risks of liabilities imposed by lawsuits and similar claims and protects the insured if the purchaser is sued for claims that come within the coverage of the insurance policy.
Originally, individual companies that faced a common peril formed a group and created a self – help fund out of which to pay compensation should any employee incur loss (in other words, a mutual insurance arrangement). The modern system relies on dedicated carriers, usually for – profit, to offer protection against specified perils in consideration of a premium.
As a matter of fact, liability insurance is designed to offer specific protection against third – party insurance claims, i.e., payment is not typically made to the insured, but rather to someone suffering loss who is not a party to the insurance contract.
In general, damage caused intentionally as well as contractual liability are not covered under liability insurance policies. When a claim is made, the insurance carrier has the duty (and right) to defend the insured.
Please note that U.S. workers’ compensation insurance generally covers only bodily injury to and death of employees, but it does not always cover other persons who may suffer injury as a direct result of such bodily injury or death.
U.S. employers often carry Employers’ Liability coverage (which is not necessarily compulsory) to protect themselves from lawsuits from such persons who would still have the right to sue them in the courts, such as an employee’s spouse who claims loss of consortium as a result of the employee’s bodily injury on the job which was allegedly caused by the employer’s negligence.
15. Expatriate Insurance
If as a skydiving business you employ an expatriate, it becomes compulsory for you to purchase a full – package expatriate insurance for the expatriate. Expatriate insurance policies are designed to cover financial and other losses incurred by expatriates while living and working in a country other than one’s own.
Please note that this insurance should be arranged prior to relocating to a new country or destination. Policies will generally cover the duration of your stay and can be purchased on a 6 – month to annual basis. It is important to purchase this insurance from a reputable company.
16. Pension Insurance Contract
If your skydiving business employs people on a full – time basis in the United States and in most countries of the world, it is mandatory that you make provision for their pension.
Pension insurance contract is an insurance contract that specifies pension plan contributions to an insurance undertaking in exchange for which the pension plan benefits will be paid when the members reach a specified retirement age or on earlier exit of members from the plan.