I relealize how tragic the recent SR20 crash was, but It brought a thought to mind about Aircraft Manufacturers Product Liability Insurance. I was an Aviation insurance broker with the largest international brokers in the industry for over 25 years. A tragity such as the SR20 crash can sometimes cause extensive and protracted products liability litigation that can eventually cost millions to defend, litigate and sometimes settle.
With Cirrus now going through the finals of an equity injection of somewhere in the area of $34,000,000 I am now wondering if Cirrus has product liability insurance in sufficient limits to provide adequate coverage limits for an incident such as this. As I’m sure you did, I received a letter from the auditor asking me to confirm my deposit and position number (670).An incident such as this could be a blow to the financial negotiations for the new investment if there isn’t product liability coverage in place.
I am not saying that litigation will necessarily arise from this incident but if it does without insurance the possibility of cloudy financial skys are there. I have seen that many of you out there are experiencing expensive premiums on your aircraft and many times unavailability of the type of liability limits that you really need to properly protect you assets.
Aviation product liability coverage is written through the same insurance markets that provide coverage on your aircraft. The pricing and availability has also been a big problem for aircraft manufacturers many of whom have gone “bare” at times.
An organization such as Cirrus needs both the investment capital and the Insurance to protect itself and its investors (let’s agree that we the position holders are investors as much as the institutional investors are) when a tragity occurs.