July 2004 157
AMA News
Academy of Model Aeronautics 5161 E. Memorial Dr., Muncie IN 47302
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ACCESS TO and retention of flying sites is a top priority of
AMA. Providing the insurance to meet the many and varied
requirements of flying site owners is a top priority of the Special
Services Department. As many of you know, the ability to
provide adequate limits and broad coverage to site owners is
often the key to obtaining a flying site.
Most of the sites require an agreement that may have several
requirements regarding insurance and other protection for the site
owner and signed by club officers. These agreements are
sometimes complex and occasionally include broad language
favoring the site owner. While in many cases there is no
opportunity to negotiate better terms, sometimes a change of a
few words can significantly reduce your contractual liability.
We offer the following comments based on our experience
with site-owner agreements, and the corresponding coverage
provided by the AMA policy.
1) Limits of Liability: Most agreements require a $1,000,000
limit per occurrence. The AMA policy has a $2,500,000 limit per
occurrence and $5,000,000 annual limit. The limit applies per
location (per site). These limits usually far exceed site-owner
requirements.
2) Primary Coverage: Site owners may require that the AMA
insurance be “primary,” that is the AMA insurance will cover the
site owner without involving the site owner’s own insurance
coverage. The AMA policy does provide primary coverage to site
owners.
3) Hold Harmless and/or Indemnity Language: This language
requires that you “hold harmless” (defend) and “indemnify”
(reimburse) the site owner for any claim or suit resulting from
site use, including hiring an attorney to defend the site owner if
necessary. The AMA policy includes coverage for contractual
liability and thus protects the site owner against whom a claim is
filed or suit brought for claims resulting from aeromodeling.
Warning: Some site-use agreements contain language to the
effect that you (club) agree to defend and hold harmless the site
owner for “any and all” claims. While the AMA policy provides
very broad coverage, no insurance policy covers “any and all”
claims. We suggest you try to negotiate a change in wording
from “any and all” to “bodily injury or property damage.” The
AMA policy insures for claims involving bodily injury or
property damage.
4) Additional Insured: Nearly all site owners want to be listed
as an “additional insured” on the AMA policy. To add each site
owner to the policy would be cumbersome and time consuming
(and nearly impossible). The insurance company has agreed that
site owners can be added as an additional insured by issuance of
a Certificate of Insurance by AMA naming the site and site
owner. Site-owner coverage must be specifically requested by the
club in writing. There is a $60 charge to the club for site
coverage.
5) Separation of Insureds: Some agreements require that the
policy be written so that any act by the club or a member will not
void coverage for the site owner. The AMA policy has a
“separation of insured” clause to provide this coverage.
These are some of the key areas of the site-use agreements we
review. There are many variations and occasionally we see new
requirements. We are available to review your site-use agreement
and offer comments or suggestions on the insurance requirements
compared to coverage offered by AMA, indemnity language, and
possibly other areas; however, keep in mind we are not attorneys
and any contract and agreement should be reviewed by your local
attorney. We look at only selected portions of a lease or
agreement involving insurance and indemnity provisions. There
may be other areas of your agreement equally critical that should
be reviewed by your attorney.
We must point out some “exposures” that are not covered by
the AMA policy.
a. Automobile Liability: The AMA policy does not provide
automobile liability coverage for members, clubs, site owners, or
sponsors. Vehicle owners are expected to have insurance
coverage on their vehicles.
b. Property (structures or other property): The AMA policy
does not insure either club-owned property (such as field
maintenance equipment or buildings constructed by the club) or
site-owner property. If the agreement makes you responsible for
property you will need to make arrangements with your local
agent.
c. Disputes over Club Policy, Procedures, or Discipline: The
AMA policy covers “bodily injury (BI) and property damage
(PD).” These disputes do not involve either BI or PD and are not
insured by the AMA policy. There may be limited coverage
under certain circumstances. Contact the Special Services
Department for clarification.
In summary, AMA’s club-liability policy is tailored to meet or
exceed the needs of most site owners. Site-use agreements can be
confusing and sometimes may contractually obligate you to more
than you expect. The Special Services Department is here to help
should you have questions or need more information.
Risk Management Flying Site Agreements
The National Model Aviation Museum
is open 8 a.m. until 4:30 p.m.
Monday through Friday,
and 10 a.m. until 4 p.m.
on Saturday and Sunday.
Closed on Sundays Thanksgiving
through Easter. Call ahead
for holiday hours,
(765) 287-1256, ext. 500.
04july.qxd 4/22/04 1:44 pm Page 157
Edition: Model Aviation - 2004/07
Page Numbers: 157