AMA News - 2004/06

To be an AMA Chartered
Club or not?AS AN AMA charted club, you enjoy many membership benefits,
including comprehensive insurance coverage and higher “limits
of liability” than is generally available in the standard insurance
market. We believe that a close examination of the benefits of
AMA liability insurance coverage for chartered clubs will make
each club member aware of this tremendous insurance program.
Here are some considerations:
1) The AMA policy protects the club as an entity. Without
entity coverage, the club’s assets may be exposed to foreclosure
in the event of a serious injury in which the club was found liable
and a judgment entered against the club, as well as individual
members. Homeowners insurance may protect the individual
members but not the club itself.
2) The AMA policy provides coverage for club officers for
their “vicarious” liability (liability as club officers for club
activity even if not directly involved in an accident). While
homeowner’s may provide this coverage, the AMA policy
specifically covers the officers and directors as an “insured,” and
the club is an insured under the AMA policy.
3) The AMA policy provides $2,500,000 limits. Most
homeowner’s provides up to $300,000. A few members may have
a personal umbrella that provides an additional $1,000,000
coverage. Unfortunately, we have experienced accidents from all
kinds and sizes of models, in all kinds of weather, at events large
and small, and when flying alone. And in a few cases, the injury
resulted from a condition of the premises, covered by the AMA
policy, but probably not by the homeowner’s. Some of these
injuries have resulted in liability settlements of up to $1,000,000.
There is no way for a club or member to know that their activities
will not result in a serious or even catastrophic claim.
4) The AMA policy provides comprehensive coverage for site
owners when a club is leasing or otherwise has access to a nonowned
flying site. Virtually all site owners demand broad General
Liability coverage naming the site owner as an additional insured.
Homeowners policies will not allow adding a site owner as an
additional insured, and would probably not offer sufficient limits
or the broad coverage required.
So the cost of AMA insurance is a bargain! If the club could
purchase a separate Commercial General Liability policy insuring
the club and the site, the premium would most likely be well in
excess of $1,000 and probably several thousand dollars,
especially for the $2,500,000 limit provided by the AMA policy.
In addition, few if any insurers will customize their coverage to
meet the needs of the club, its officers and directors, and site
owners.
In summary, the AMA liability insurance program meets a
critical need for all or nearly all AMA clubs. It protects the club’s
assets, the officer’s liability for injury or damage, and site owners
when requested by the club. The extremely broad coverage
customized for the clubs and AMA members exceeds any
available on the open insurance marketplace.
—Carl P. Maroney