Use of Non-owned Aircraft for UAB-Related Business Purposes

Use of Non-owned Aircraft for UAB-Related Business Purposes

Abstract:
This policy requires owners/operators of chartered, leased, or loaned aircraft to provide evidence of aviation liability insurance and defines limits of liability defined by type and use of the aircraft.
Effective Date:
8/7/2014
Contacts:
None Assigned
Administrative Category:
Applies To:
Faculty, Staff, Students
Keyword(s):
Material Original Source:

University of Alabama at Birmingham

USE OF NON-OWNED AIRCRAFT FOR UAB-RELATED BUSINESS PURPOSES POLICY

August 7, 2014

Introduction

The University of Alabama at Birmingham (“University”) is exposed to financial risk from the operation of non-owned aircraft on University business.  Non-owned aircraft includes any aircraft that is not owned by the University, including any chartered, leased/rented, or loaned aircraft.  In most cases, uses include aircraft chartered for a specific trip or series of trips, a lease or rental of a temporary replacement aircraft while a University-owned aircraft is out of service, and when aircraft are offered by persons or businesses with close ties to the University for use by University employees on University business.

To reduce the financial exposure, the University requires liability insurance from owners/operators of chartered, leased/rented, or loaned aircraft.  The University carries liability insurance for non-owned aircraft that will apply on an excess basis and the underwriter of that insurance has certain requirements for the underlying primary insurance.  This policy was developed based on those requirements.  The policy was developed with the understanding that most charter arrangements are made with notable commercial airlines and include a qualified flight crew.  The policy also anticipates that leased/rented or loaned aircraft are typically of the business jet type, with a passenger capacity (plus flight crew) of no less than 4 or more than 10 persons.

On rare occasion, a University employee who owns their own aircraft wishes to fly their aircraft on University business.  That practice is strongly discouraged and must be approved, in advance and in writing, by the Vice President or other executive administrator responsible for the department to which the employee is assigned.  All requirements outlined in this policy with respect to airplane type, insurance requirements, and pilot training and experience must be met before any exception will be considered.

A case-by-case review will be necessary for situations that fall outside of these anticipated uses of chartered, leased/rented or loaned aircraft.

Policy

Owners/operators of chartered, leased/rented, or loaned aircraft must provide evidence of aviation liability insurance with limits of liability as defined below based on the type and use of the chartered, leased/rented, or loaned aircraft.

Aviation Liability Insurance Requirements

Unless adjusted or waived by the University, the following minimum aviation liability insurance limits apply:

Charter Aircraft (Pilots are not included in the Passenger count)

Under 10 Passengers           $20,000,000 Per Accident
11-20 Passengers                $30,000,000 Per Accident
21-30 Passengers                $40,000,000 Per Accident
31-40 Passengers                $50,000,000 Per Accident
41-50 Passengers                $60,000,000 Per Accident
Over 50 Passengers             $60,000,000 Per Accident Plus $1,000,000 Per Passenger Above 50, Subject to a Maximum of $250,000,000

          Charter Pilot Requirement – Charter Aircraft fall under an FAA classification that requires all pilots to hold an Air Transport Pilot (ATP) license.

Leased/Rented or Loaned Aircraft (Pilots are not included in Passenger count)

          1-2 Passengers                   $5,000,000 Per Accident
          3-4 Passengers                   $10,000,000 Per Accident
          5-6 Passengers                   $15,000,000 Per Accident
          7-8 Passengers                   $20,000,000 Per Accident
          9-10 Passengers                 $25,000,000 Per Accident
          Over 10 Passengers            $25,000,000 Per Accident Plus $2,500,000 Per Passenger Above 10

Pilot Requirement – All leased/rented or loaned aircraft must be flown by a qualified flight crew with a chief pilot and co-pilot.  Single pilot flights are not allowed by the University’s aviation liability insurer.  It is preferred for all pilots to have an ATP license with no less than 75 hours of flight time in the aircraft being flown or an aircraft of a similar design.  The pilots must also have successfully completed a Manufacturers approved Ground and Flight school in the make & model aircraft being flown within the preceding 12 months of the flight.  If the pilot does not have an ATP license, a commercial license is acceptable, but only with a minimum of 200 hours of flight time in the aircraft being flown or an aircraft of a similar design and the pilot should also have successfully completed a Manufacturer’s approved Ground and Flight school in the make & model aircraft being flown within the preceding 12 months.  If an aircraft’s owner also acts as the pilot-in-command, the University’s aviation insurance underwriter must review and approve.  The Office of Risk Management arranges this review.

Piston-Driven Aircraft Prohibited – The University’s aviation insurer has strict limitations and restrictions on the use of piston-driven aircraft.  Use of such aircraft on UAB business is prohibited.

The insurance limits outlined above must be provided under policies issued by an insurance company licensed or admitted as a surplus lines insurer in the State of Alabama and carrying a minimum A.M. Best’s rating of A- VIII.

Certificates of Insurance

The University must receive a Certificate of Insurance prior to the scheduled trip.  The certificate of insurance must include the following elements and should be maintained by the department using the aircraft, with a copy provided to the Office of Risk Management:

  • Insured Entity
  • Insurance Carrier(s)
  • Policy Effective/Expiration Dates
  • Policy Number(s)
  • Policy Limits
  • Cancellation Notice Provision (Written notice to the University with a minimum of 10 days for non-payment or 30 days any other reason)
  • Additional Insured and Waiver of Subrogation Language as Follows:
The Board of Trustees of the University of Alabama for the University of Alabama at Birmingham and their individual trustees, officers, directors, employees, agents and representatives are included as an additional insured as respect to the Aviation Liability policy. Unless precluded by law, all policies waive the right to recovery or subrogation against the Board of Trustees of the University of Alabama, its individual trustees, officers, directors, employees, agents and representatives.

Exceptions

Exceptions may be made in the event of an emergency need for medical evacuation/transport.

Implementation

The Vice President for Financial Affairs and Administration is responsible for procedures to implement this policy.