The perceived wisdom has been to allow your corporate/private aircraft to be managed by a recognized, professional team who will, on yours and other privately owned aircraft’s behalf, arrange pilots, maintenance, charters and insurance.
When you are looking at economies of scale and accessibility to charterers it all makes sense.
If as an owner you are looking to get charter revenue and don’t want to employ pilots and all of the hassle that goes with it, then using a management company is a great option however, you should question whether including insurance is in your best interests.
What is the main reason to include insurance within a managed fleet? There is only one, the premium. In theory the larger the fleet the lower the per-unit premium.
Why would you seek insurance outside a managed fleet?
You do not have ownership of your own insurance and this manifests itself in many ways. Here are 5 reasons to consider.
• Claims
As an individual owner you will be prey to the loss record of the other owners and the fleet in general which has the potential to increase the per unit cost.
• Pilots
If you employ your own high time pilots, you are still affected by the lowest experienced pilot or open pilot warranty which has a negative effect on your premium.
• Profit Commission/No Claims Bonus
You buy individually you earn your own Profit Commission and/or No Claims Bonus, a loss on a fleet will mean that you don’t!
• Premiums
You will have a full breakdown of your premiums rather than receiving a monthly, quarterly or even annual billing system.
• Current Market
Rates for Business Jets have never been cheaper, the differential between a managed fleet and individual rate has closed considerably. With the earning of a No Claims Bonus or Profit Commission the gap could be eradicated completely.
So simply put, this could be the time for you to look at insuring outside the managed fleet system and enjoy the benefits of premium control and profit commission.
Do you want to find out more?
If so please contact us on [email protected] and we will be pleased to assist.