What are smooth liability limits vs subliability limits, is a common question we get but it is too often miss-understood. We hope the information below will help give you some insight.
What is liability insurance: It is part of the general insurance system of risk financing to protect the insured from the risk of liabilities imposed by lawsuits and similar claims. Liability insurance also protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy.
Aircraft Liability Insurance: Applies to the named insured’s legal obligation for bodily injury, including death incurred by someone other than the named insured and property damage to the property owned by someone other that the named insured.
Smooth Limit: Often referred as having 1 Mil smooth liability coverage, is a combined Single Limits “CSL” per occurrence including passengers. This limit allows Property Damage or Bodily Injury claims to passengers or non-passengers of up to $1,000,000 without sub-limits. This option is usually more expensive and not available with every carrier. The reason behind this, is due to the financial risk exposure being much higher.
Sublimit: This is the most common liability limit. Also know as “standard liability limits” every carrier offers this limit of $1,000,000 per occurrence, $100,000 per passenger, $5,000 per medical. This limit allows for Property Damage or Bodily Injury claims to non-passangers (people on the ground or in another aircraft) up to the $1,000,000 limit. However passengers in the aircraft are limited to $100,000 per passenger, per occurrence. The sub-limit set in place helps reduce financial exposure, which in turn helps keep insurance premiums lower.
**Note some companies offer higher sub-limits. Consult a knowledgeable insurance broker like BWI for more information on Aircraft Liability Insurance.
Aviation Insurance Agent