Freelance CFI's...Insurance? LLC? He

[George Jetson]

To all freelance CFI's,

I am considering doing some freelance instruction for a local flying club.

My question is two fold.

1. Do you carry CFI insurance and if so, what kind and how much protection?

2. How do you protect your estate from lawsuits/liability, etc? LLC?

Thanks!

GJ

PS - Are there any pitfalls I should be aware of or any other tips or hints? This would be a side job as I do have a full time career already.

 

[Jmmccutc]

AOPA offers CFI insurrance...and so do several other companies...i'm not sure of all the specifics, but PM me and i can get you intouch with someone that knows this topic alot better than i do....

jmmccutc

 

[midlifeflyer]

2. How do you protect your estate from lawsuits/liability, etc? LLC?

No. Contrary to unfortunately very popular belief, setting up an LLC or corporation or any other from of limited liability entity will =not= protect you or your personal assets/estate from lawsuits or personal liability for something that =you= did wrong.

What protects you is (1) having nothing and/or (2) insurance. In terms of insurance, get what you can that satisfies your assessment of true exposure and risk. Most CFI-specific insurance isn't that expensive (unless you are instructing in your own airplane). It's essentially a non-owner policy with a CFI liability add-on that adds about $100 or less to the premium. Available policies are typically up to $1M overall with a $100K per seat limitation and hull coverage for whatever you want to pay.

 

[Iceman21]

Thread resurrected

I am considering venturing out on my own as a freelancer once again.... This time I am serious.

Question is, would it be smart to set up a small business and incorporate to take advantage of tax benefits?

Any one have any experience here that would care to chime in?

 

[pilotman2105]

What protects you is (1) having nothing

Splendid. I'm protected.

 

[FlyingToIST]

No. Contrary to unfortunately very popular belief, setting up an LLC or corporation or any other from of limited liability entity will =not= protect you or your personal assets/estate from lawsuits or personal liability for something that =you= did wrong.

What protects you is (1) having nothing and/or (2) insurance. In terms of insurance, get what you can that satisfies your assessment of true exposure and risk. Most CFI-specific insurance isn't that expensive (unless you are instructing in your own airplane). It's essentially a non-owner policy with a CFI liability add-on that adds about $100 or less to the premium. Available policies are typically up to $1M overall with a $100K per seat limitation and hull coverage for whatever you want to pay.

Be carefull about the AOPA 's insurance. As far as I recall it doesn't protect some complex work and/or twin time if that's the intent. I was in touch with a flight school to use their aircraft for some independent work. One thing that you have to make sure that the insurance you get meets the minimums of the of the schools insurance requirements.

You have to think about the angles that you may get sued and then determine your insurance requirements that way. If you are CFI'ing for the owner, you may get sued by his insurance company, by their estate, etc. If you are using some other flight school's aircraft, you can get sued additionaly by the owner of the flight school. (Or the flight school and the owner of the aircraft if it's a leaseback)

I found NAFI-Falcon Insurance to have better coverage than AOPA's rates and coverage. NAFI membership is highly recommended and it pays itself off with free FLYING that you get.

As far as LLC, you are not protected. Unless you form 4-6 layers of it and then declare bankrupcy during the lawsuit process.

Hope this helps..

PS: Don't think as a legal or financial consulting

Independent work is a lot of fun if you can make it work for yourself.