Risk Management Questions.

[aviator1978]

Ok, so I'm a contract CFI, a tire blows out on landing, we go off the runway and into the trees. The million dollar lawyer I'm instructing gets killed or suffers serious injury. The lawyers family (now without the golden goose), decides to take me to court for everything I have.

How often has this actually happened in real life?

If you've heard of it happening, were the courts sympathetic to the instructor (or any contract pilot)?

Are there limits to what they can sue for? (My current net worth is in the range of -$50,000, guess they could get my car worth $2000)

If I purchase an CFI insurance policy which covers say $100,000 single person injury, and am sued for 500,000, am I SOL for the 400,000 if I lose in court?

What the hell is a LLC? Any by forming one am I truly limiting any of my liability?

And finally, is being self insured worth it?

Thanks for all you comments.

 

[mar]

How's your blood pressure?

I wouldn't worry too much about this kind of thing. I suppose it's always a good thing to try to protect yourself from aggressive lawyers but let's be honest.

Did I understand correctly your net worth is *negative* $50,000?

Believe me, if someone died as the result of a blown tire the lawyers aren't gonna pursue the starving CFI. They're goin' after the tire manufacturer.

Have you heard the expression "Deep Pockets" before? How about "Product Liability"? If not, do some research. These concepts have literally shaped the state of modern aviation.

Good luck.

 

[aviator1978]

as of the last medical, my blood pressure was still healthy. It's not that I'm extremely paranoid, I just always like to have a worst-case plan.

Thanks

 

[GravityHater]

Check the laws in your state
I am told in my state, no one can attach
your home
one vehicle
personal belongings up to 30 or 50K I can't remember.
wages

They can attach bank accounts.
You really dont have anything to worry about til you have a decent net worth which few cfi's do.

 

[MTpilot]

"When you ain't got nothin, you got nothing to lose"

 

[FN FAL]

Ok, so I'm a contract CFI, a tire blows out on landing, we go off the runway and into the trees. The million dollar lawyer I'm instructing gets killed or suffers serious injury. The lawyers family (now without the golden goose), decides to take me to court for everything I have.

How often has this actually happened in real life?

If you've heard of it happening, were the courts sympathetic to the instructor (or any contract pilot)?

Are there limits to what they can sue for? (My current net worth is in the range of -$50,000, guess they could get my car worth $2000)

If I purchase an CFI insurance policy which covers say $100,000 single person injury, and am sued for 500,000, am I SOL for the 400,000 if I lose in court?

What the hell is a LLC? Any by forming one am I truly limiting any of my liability?

And finally, is being self insured worth it?

Thanks for all you comments.

Did you catch the thread on the helicopter pilot in Hawaii that's getting prosecuted on several counts of reckless homicide/manslaughter in the matter of a helicopter crash?

If your actions or lack of action, caused the tire to blow, you could be in jeopardy of some sort of reckless endangerment or reckless homicide criminal charge.

I know you were asking about lawsuits and civil liability, but the criminal liability is a risk you have to figure into the equasion these days as well.

 

[aviator1978]

Did you catch the thread on the helicopter pilot in Hawaii that's getting prosecuted on several counts of reckless homicide/manslaughter in the matter of a helicopter crash?

Hawaiian Prison, huh. Wonder what kind of meal plan they get. Guess it could be worse. Think my student loan lender would grant me a deferment?

back to another question...has anyone started an LLC for liability purposes?

 

[TurboS7]

Aviator1978 PM me if you have any questions on the BP.

 

[ePilot22]

back to another question...has anyone started an LLC for liability purposes?

Don't let the name fool you. An LLC protects an owner's assets from being sold in order to pay a company debt. Only the company is liable for the debt. It has nothing to do with personal liability protection in the case you described. Do some research on an LLC and keep in mind - debt and equity in a company, not injury and death from the service of that company.

You might want to look into an Insurance Umbrella. I had a personal umbrella policy for $1 million and it ran about $250 per year. Of course, one for flight instruction is going to be more. Talk to an insurance person (I can't believe I'm even suggesting that, but they know their business better than me.)



eP.

 

[midlifeflyer]

Don't let the name fool you. An LLC protects an owner's assets from being sold in order to pay a company debt. Only the company is liable for the debt. It has nothing to do with personal liability protection in the case you described.

That is correct and probably the most misunderstood part of these entities.

 

[midlifeflyer]

How often has this actually happened in real life?

Based on some very informal research, it's pretty rare. I haven't even heard of a heck of a lot of these types of claims even where the CFI arguably =is= at fault (although I am sure it happens.

This is purely personal, not intended as advice on how anyone else should live their lives, and maybe I'm living in a fools' paradise, but I'm a lawyer and a CFI (very part time, mostly with other non-aviation career people) and I don't worry about it.

 

[wheelsup]

Don't worry about what you're doing now - you can control that. It's what will happen to a primary student 1, 5, 10 years down the road that will get you. Make excellent record keeping a habit. Write down everything you covered in your logbook as well as the students (in case his/hers is destroyed in an accident).

Let's say you signed off a guy for a private. He passes, and then 2 years later goes and kills himself and everyone in the plane along with someone on the ground because he spun it in. BAM! You're %$#%ed. I've heard this horror story more than once. It happened at one of my schools when a CFI did a checkout and the guy ran out of gas on a later flight. The lawyers came after the CFI because the checkout procedure didn't note that they covered proper engine and fuel management procedures ...

~wheelsup

 

[midlifeflyer]

I've heard this horror story more than once.

So have I. I've never been able to verify one though.

 

[ePilot22]

Quote:
Originally Posted by ePilot22
Don't let the name fool you. An LLC protects an owner's assets from being sold in order to pay a company debt. Only the company is liable for the debt. It has nothing to do with personal liability protection in the case you described.

That is correct and probably the most misunderstood part of these entities.

Good! Then I am learning something in school! :beer: !

It's what will happen to a primary student 1, 5, 10 years down the road that will get you. Make excellent record keeping a habit. Write down everything you covered in your logbook as well as the students (in case his/hers is destroyed in an accident).

When teaching stalls and STALL RECOVERY, I always note the recovery part in the remarks of mine and my students log book. Same thing with the emergency procedures. I'll write "Emergency Proc - Engine faliure and restart procs". Or "Landing Gear failure and manual extension procs".

Always CYA!



eP.

 

[FN FAL]

Hawaiian Prison, huh. Wonder what kind of meal plan they get. Guess it could be worse. Think my student loan lender would grant me a deferment?

back to another question...has anyone started an LLC for liability purposes?

They don't want to send you to prison, they just want the conviction. You'd probabably be able to plea to a five year suspended sentence and probation, if you plea guilty and don't make them spend the money on a court trial.

 

[wheelsup]

When teaching stalls and STALL RECOVERY, I always note the recovery part in the remarks of mine and my students log book. Same thing with the emergency procedures. I'll write "Emergency Proc - Engine faliure and restart procs". Or "Landing Gear failure and manual extension procs".

Always CYA!
eP.

I agree, I went a step further and put "stall entry, recognition, and recovery". "Fuel managment procedures" "Engine and powerplant operation" Etc. etc. I learned a lot from my lawyer pilot friends . There should be a big FAQ about all this stuff - however I tried to mimic the req's in part 61 as a guideline. Let's hope it works...