Debunking common aviation insurance myths with Mike Dalton – Part 1

Welcome to our four-part series featuring Mike Dalton as he delves into the world of aviation insurance, debunking common myths and misconceptions. Join us as we navigate through the complexities of aviation insurance, separating fact from fiction, and ensuring you are well-informed with accurate and practical information. Stay tuned for each instalment as we unravel these myths one by one!

Myth #1 – I don’t need ground risks insurance while my aircraft is laid up long term with my LAME

We often hear this “My LAME has it insured” or “Its covered under my LAMEs insurance”.
Both statements highlight a lack of understanding about what is commonly called
“Hangarkeepers liability” insurance (HKL) and who is and is not protected by this type of
policy.
Hangar owners/operators that rent out space to aircraft owners for aircraft storage and
maintenance workshops carry some potential exposure for damage to aircraft that are
deemed to be in their care, custody or control. In very simple terms, this means that if the
aircraft is damaged and that damage is found to be due to the hangar owner/operators’
negligence, they could be liable at common law for damages resulting therefrom.
A Hangarkeepers liability policy provides protection to the policy holder against common law
liability claims for damage to the property of others. It is not a material damage policy and
requires the owner of the damaged item (the plaintiff) to take a common law liability action
against the hangar owner/operator and in the process, prove both negligence and the
quantum of their claim.
The easiest scenario to envisage is when your LAME has your aircraft up on jack for a wheel
change or gear retraction test and for whatever reason, the aircraft comes off the jacks and
is damaged. This is clearly damage that is caused by some negligence on the LAMEs part
and they would be easily found liable for damages at common law.
An alternative scenario however, that would be somewhat difficult to prove was your LAMEs
fault, is a grass fire or flooding event that causes damage or loss to a hangar tenants’
aircraft. Whilst not common, these events do occur, and we need only to think back to Mar
2022 to see the devastation caused by flooding at the Lismore airfield or 2019 at
Murwillumbah.
If your aircraft is damaged in one of these natural event scenarios, and you have been
relying on the LAMEs policy to protect your aircraft, you will likely be very bitterly
disappointed when trying to make a claim against him, as it will be extremely difficult to
prove negligence on their part.
Holding your own hull ground risks insurance policy whilst your aircraft is laid up for the
longer term provides you protection for your asset on a policy that is for your benefit and
does not require you to take a common law action.
In summary, your aircraft is never covered under your LAMEs policy as that policy protects
your LAME – not you.

Mike Dalton is our Head of Aviation at Agile Underwriting. He is a licensed pilot with a Commercial, ATP and RAAus Pilot qualifications in Australia and the US. Mike enjoys working with customers and discussing aviation and is eager to simplify aviation insurance for customers and brokers.
Mike has 30 years of insurance experience, specialising on aviation underwriting. He has extensive experience writing risks in Australia, New Zealand, Papua New Guinea, and the South Pacific and has written policies in the airline, manufacturing, airport, and general aviation industries. He has held management positions at one of Australia’s largest Aero Clubs and has his own Air Operators Certificate for passenger transport charter operations. He owns and operates a small vintage aircraft collection and has flown over 50 different general aviation aircraft types.