FAA Weighs In On Aviation Insurance

Fox Rothschild LLP

Fox Rothschild LLP

Virtually all Americans know that the FAA regulates air carrier safety in the United States.  However, most Americans are unaware that the Department of Transportation also maintains oversight of air carrier operations through a robust set of economic regulations.  According to a newly released Information for Operators (InFO), the FAA is concerned that a number of direct air carriers are also unaware of some of these economic regulations.

On October 21, 2020, FAA Flight Standards Service released InFO 20006, to “remind” U.S. and foreign direct air carriers that they are required to maintain evidence of aircraft accident liability insurance coverage on file with the FAA.  Pursuant to 14 C.F.R. Part 205, all such carriers must maintain a liability insurance policy or have a self-insurance plan that meets certain minimum amounts. In addition, adequate documentation of the plan or coverage must be filed with the Department of Transportation.  For direct and foreign air carriers, the insurance must cover, among other things, accident liability insurance for bodily injury to or death of passengers, with minimum limits of $300,000 per passenger.

Despite the clear mandate in the regulations, the InFO states that the FAA has “learned that U.S. and foreign direct air carriers, as part 205 describes, might not submit necessary information to the FAA to ensure compliance with part 205.”   It appears that there have been incidents where carriers have lost or changed their coverage and failed to notify the FAA, or have failed to update the documents on file when policies are renewed.

The FAA recommends that all air carriers “should review their most recent air carrier liability certificates of insurance filed with the Technical Programs Branch and ensure all information for aircraft listed on the applicable operations specifications remains accurate.”  Air carriers can updated their insurance information by submitting OST Form 6410 or 6411 to the Technical Programs Branch.  All of the forms and filing instructions are available HERE.

While the FAA and DOT have relaxed a number of regulatory requirements in the age of COVID, this is not one of them.  The FAA has just reminded everyone that it expects everyone to ensure the accuracy of their insurance filings and provide updates in a timely manner

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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