Insurance Coordination Between an Aircraft Owner and Management Company

When an aircraft owner hires a management company, both parties may reasonably expect the other to be handling insurance details. That is precisely why the arrangement needs an explicit review. Paying the premium, arranging the policy, operating the aircraft and having protection under the policy are different responsibilities.

The right starting point is a written map of the relationship and the insurance documents supporting it. Do not assume that every managed aircraft follows one standard policy structure or that a charter flight automatically changes which policy responds first. At BWI, we help owners and aviation businesses present the actual operating arrangement for review. Request a commercial aviation insurance quote and include the proposed management agreement and existing policy documents.

Decide Who Is Responsible for Each Insurance Task

Begin with administration. Identify who requests quotations, provides underwriting information, approves terms, pays the premium, receives policy documents and monitors renewal. Those tasks may be shared, but each needs a person who can explain its status. A management agreement that says insurance included may not tell the owner enough.

Then address authority. Who can instruct a policy change or approve a different deductible? Who can add a new pilot or change the requested value? The owner should understand how instructions will be confirmed and how changes will be communicated. An efficient management service still needs a reliable record of what the owner authorized.

Finally, agree on escalation. If an insurer requirement conflicts with a proposed flight, training plan or contract, identify who decides what happens next. A coordinator should not have to discover on departure morning that the manager and owner have different understandings of the accepted terms.

Build a Responsibility and Coverage Map

Use the map below to start the conversation. The exact allocation belongs in the agreements and accepted insurance arrangement. The table does not prescribe which party must hold a particular policy or claim that one model fits every aircraft.

Explain Who Owns and Who Operates the Aircraft

Provide the registered owner name and identify any separate entity that uses the aircraft. If the aircraft is held in an LLC while a related operating business schedules travel, describe that relationship. The management company needs its own precise identification, particularly when the business's brand differs from the contracting or operating entity.

Next, describe what the manager actually does. Supplying pilots differs from maintaining the aircraft, controlling dispatch, arranging hangarage or offering charter service. A label such as full service management can conceal several separate activities. A short factual description is more useful to an insurance reviewer than a marketing brochure.

Do not equate regulatory operational control with every insurance question. Operational control is an important legal and regulatory issue, but insured status and coverage still depend on the issued contract. Coordinate the legal description of the operation with the insurance submission so the two records do not describe different relationships.

Compare the Agreement With the Actual Policy

Read the insurance section of the management agreement next to the declarations, policy forms and endorsements. List each promised coverage feature and the provision expected to support it. Where the agreement requires the owner or manager to be protected, identify the precise wording and applicable activity.

An agreement can allocate a deductible between the parties without changing the insurer obligation. It can also impose indemnity obligations that need separate analysis. Legal counsel should explain the contractual obligations, while the insurance review determines whether and how the proposed policy addresses them.

Keep exceptions visible. If the contract requires a provision that is unavailable or narrower than requested, the business decision should be made with that difference understood. A certificate that repeats contractual language cannot replace an endorsement or establish that an insurer accepted a new obligation.

Review Insured Status Without Relying on Labels

Named insured, additional named insured and additional insured are not interchangeable shortcuts. Ask what rights, duties and scope of protection the proposed wording gives each party. The same phrase in an email does not establish that two policies provide the same protection.

The Global Aerospace explanation of additional insureds is useful background on specified liability protection. For a managed aircraft, the relevant question is the actual policy grant for the owner, manager and people involved. Avoid assuming that a pilot permission automatically provides the manager every protection it expects.

Also review requests involving lenders, lessors and affiliated companies. Their interests may concern liability, aircraft damage proceeds or protection subject to special conditions. Ask the reviewer to identify the provision addressing each interest. This keeps a long list of names from being mistaken for a complete analysis.

Coordinate Owner Flights Charter Flights and Maintenance Moves

Describe the planned use in categories that match the real schedule. Owner travel, positioning, training, maintenance flights and charter service should not disappear inside a statement that the aircraft is managed. Explain who provides the crew for each activity and whether another operator may become involved.

Do not assume that hull coverage ignores the purpose of a flight or that an operator's policy always becomes primary whenever a flight generates revenue. Those conclusions require the actual policy wording and arrangement. Where more than one policy may be relevant, have the review identify their intended interaction and unresolved questions.

For broader commercial context, see our commercial aviation insurance services. The coordination exercise here is narrower: the documents need to describe how this aircraft will be used under this management agreement, including changes from the owner's previous arrangement.

Ask About Ground Custody and Third Party Work

Management can place the aircraft in the hands of hangar operators, maintenance facilities and ground handlers. Identify who chooses those providers and what authority they have to move or work on the aircraft. An owner may know the manager well while knowing little about the facilities holding the airplane.

Request relevant contractual and insurance information without assuming a vendor policy replaces the owner's protection. A facility having liability insurance does not by itself answer whether a particular loss is covered, who must be legally responsible or what limits and exclusions apply.

Agree on reporting when damage is discovered during maintenance or ground handling. The manager should know whom to contact, what evidence to preserve and when the owner must be involved. Keep the arrangement practical: photographs, work orders, custody dates and contact information are more useful than a vague promise to sort it out later.

A Hypothetical Management Handoff

Consider an owner moving an aircraft from self managed private use to a management company that will supply crews and arrange maintenance. Charter use may be considered later but is not part of the initial plan. This example illustrates a review sequence and does not describe a customer or promise a coverage outcome.

The owner supplies the existing policy and proposed agreement. The manager provides its legal entity, crew plan, initial base and intended activities. The review identifies the effective handoff date, requested insured interests and any policy changes needed for the initial arrangement. Future charter activity is recorded as a separate change to review before it begins.

A week later, the manager proposes a contract pilot for the delivery flight. That becomes a specific update to the accepted pilot arrangement. This is why a successful handoff includes a change notification process: the original paperwork cannot anticipate every staffing and scheduling decision without further communication.

Keep the Arrangement Current After the Handoff

Schedule a document review at renewal and after material changes. A new lender, management entity, aircraft base, operating territory or use can make an old certificate an incomplete description of the current arrangement. Retain both the request and the accepted change.

Owner access matters as well. Agree how the owner obtains declarations, relevant endorsements and evidence of current insurance. A monthly statement showing an insurance expense establishes a payment record, not the full terms of the policy.

If management ends, review the transition before cancellation or removal of interests. Determine who holds the aircraft, who will move it and when replacement insurance becomes effective. Termination of the service agreement and termination of a policy should not be assumed to occur safely at the same instant.

Documents to Gather for the Coordination Review

• Management agreement and any lease or operating agreement.
• Current declarations policy forms and relevant endorsements.
• Exact owner manager operating company lender and lessor names.
• Aircraft identification requested value and equipment information.
• Pilot roster training plan and contract crew arrangements.
• Owner and commercial use descriptions including delivery and maintenance flights.
• Contact list for policy changes incident reporting and renewal instructions.

Frequently Asked Questions

Does the Owner Always Buy the Policy?

There is no useful universal answer for every management arrangement. Identify who is arranging insurance under the agreement and inspect the actual policy structure. The owner should understand its insured interests, the permitted use and how it receives evidence of the accepted terms regardless of who handles administration.

Is the Manager Automatically an Insured?

Do not rely on the management relationship alone. Review the policy definitions and endorsements and identify what protection applies to the manager activities. Supplying the manager name on an application or certificate is not a substitute for confirming the issued wording.

Can We Rely on the Manager's Certificate?

The certificate can provide evidence, but obtain the documents needed to understand the owner's protection and relevant conditions. Check the aircraft, entities, dates and stated coverage. If a provision matters to the agreement, identify the supporting policy wording rather than relying on a broad summary.

Does Charter Use Require Another Review?

Yes, review a proposed change into charter use before it begins. The use, operator, crew, customer requirements and evidence obligations may differ from private owner flights. The review should determine the accepted arrangement rather than assuming the existing private use documents extend unchanged.

Who Handles the Deductible After Ground Damage?

Look first to the policy for the insurance calculation and then to the agreements for how the parties have allocated costs between themselves. Those are separate questions. Do not assume a contract requiring the manager to pay a deductible changes what the insurer owes or establishes another party liability.

What Happens When We Change Management Companies?

Plan the effective dates and interim custody before the handoff. Provide the new agreement, entities, crew and use for review, and identify which existing interests should remain or change. Retain written confirmation so the aircraft movement between managers does not depend on assumptions about overlapping protection.

Get a Quote From BWI for Your Managed Aircraft

At BWI, we help aircraft owners and aviation businesses organize the facts behind a management insurance arrangement. Bring the agreement, existing policy and operating plan so the review addresses the parties and activities actually involved.

If the aircraft will be used in a charter operation, include that plan from the start. Our Part 135 insurance page provides additional context for that commercial activity, while the management agreement remains an important part of the submission.

Get a commercial aviation insurance quote from BWI or call 866 788 6291. Tell us whether you are beginning management, changing managers or reviewing an existing arrangement so we can help identify the insurance questions for that handoff.