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CFI's- Independent Contractors

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Well-known member
Nov 26, 2001
As a fresh CFI (MEII, but no students yet. Currently swimming in the FSI pool) I am wondering how others have approached being a CFI from a finacial outlook. Especially since as a CFI at FSI and I assume other large schools, you are actually considered an independant contractor. The reason for this I quess is to protect the school from liability issues. But how can I protect myself? (If I do my job correctly nothing will happen, but what if something does?)
The advice I have recieved has ranged from "hide all your assets off shore" to the more realistic "incorporate yourself" or "purchase AOPA CFI insurance".
How does one actually go about becoming incorporated and will it really help? Is that AOPA insurance worth it?

It not like I have millions of dollars or anything but enough that it would probablly be worth a lawyers time to go after.......
I was an "Independent Contractor" myself during my CFI days. I set up a DBA (Doing Business As) account with the state to make it all good and fine with the IRS. You have to pay your own taxes, worry about your own insurance, and a few other headaches but it has some advantages. The school I worked for had a group insurance policy that all the instructors split the cost of, which made it fairly economical. I would worry more about liability than hull insurance. Unless you plan on totaling a high end airplane a smaller amount will usually cover the repairs of more common mishaps. Just remember to set aside money from every paycheck less you have to scramble come tax time. I too made more money as a CFI than I do as a "real pilot" (come on, laugh a little as I'm making fun of myself). I lived in a high-end area with plenty of tech millionaires buying expensive airplanes needing someone to fly them. I set my own schedule, made good money, traveled a lot, never had to deal with crew scheduling, never sat reserve...........why am I here again????????? Have fun and try to get as much from the experience as you can.
Independent CFI precautions

Good idea to set up a dba bank account. Purchase the best professional liability insurance you can afford. Be very clear that it provides a legal defense; it should.

Incorporation or LLCs aren't always the firewalls you think they are. Even if you take some business entity form, you have to be very carefully to segregate your business activities from your personal activities. If they become mingled in any way and you incur a liability event, the so-called "corporate veil" can be pierced and your personal assets can be at risk.

You can do your job correctly but something can still happen. Be careful and CYA.

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