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For the more than eight million people who buckle into an airplane seat every day, there is a lot expected in terms of aero-safety. And for the manufacturers of airplane parts, there is a lot of risk involved should something fail.
Companies engaged in manufacturing aerospace components face a high level of exposure – greater, in fact, than many other manufacturers.
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Kyle Sparks, chief underwriting officer for aviation at Starr Insurance, recently spoke with Insurance Business about the insurer’s products and completed operations liability coverage.
“Any manufacturer, whether it be an airframe manufacturer, an engine manufacturer, or a sub-component manufacturer, is going to have the need for aircraft product liability because most large casualty programs will have an aviation exclusion,” he said. “So that’s where we come in with our aerospace product for aircraft product liability.
“It’s going to take care of any bodily injury or property damage arising out of an aircraft crash because of a defective product that someone manufactured.”
And the product covers every aspect of aircraft building, from the largest components, like jetliner frames, down to the screws in an armrest, Sparks said.
“We’re going to insure anything from a major airframe manufacturer such as Boeing, Airbus, Embraer, down to somebody that’s making something as little as an armrest for an aircraft,” he explained. “So, it’s quite a diverse product.”
For some manufacturers involved in airplanes – such as companies manufacturing screws and rivets used in aircraft construction – their products will be used across a range of industries. But often their standard liability program for that screw or rivet will pick up everything else, but will exclude aviation exposure.
Starr insures everything from small private planes, to domestic and international passenger planes, to helicopters, military aircraft and missiles, and spacecraft and satellites.
The limits Starr offers are, necessarily, huge, Sparks said.
“For [jetliners], whether you’re the airframe manufacturer or the sub-component manufacturer, you’re dealing with catastrophic exposures, because you’ve got a couple hundred people on an aircraft,” he said. “You can have some very large losses, so limits on some of these large aviation programs are going to go to $2 billion or more.”
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