Ame Contractor Liability Insurance

[sharky75]

Hi, I'm working as a contractor under an federal incorporation, for an operator who endorse me with an ACA. I was wondering what will happen in a civil lawsuit against my maintenance action, do the AMO will defend me ? Do I need to have my own liability insurance ?

 

Here the answer I got from an lawyer, specialized in aviation:

 

'' In the case of a company invoicing services for another company, there is no actual coverage for civil liability. Each entity is supposed to get their own coverage, as we are pursuing under the civil court. The problem lied whit the AMO insurance company, witch only covers the AMO employee as defined in their insurance policy definition. The only way to get covered, is the AMO insurance policy amendment to include the XXXXX Canada inc and it's employee in their coverage. ''

 

As I spoke with somes people before, the idea of being an ACA holder under an AMO was supposedly getting us some coverage in case of a lawsuit. The Aeronautical Act, under witch the CAR's are regulated, doesn't have any power in a civil lawsuit, the civil court is a provincial entity.

 

So in conclusion, I strongly suggest that if you are a independent AME contractor, you should get a liability insurance, covering for light helicopter around 5 000 000$, for a 3500-4000$ per year premium. In case of medium and heavy, the coverage should be around 10-15 millions, considering 1 millons per pax. These coverage will be a guaranty that you don't loose your house, car and everything else in case of an accident that you might not even being responsible after the BST conclusion.

[Lunchbox]

These coverage will be a guaranty that you don't loose your house, car and everything else in case of an accident that you might not even being responsible after the BST conclusion.

 

If you carry out your work in accordance with the airworthiness requirements and aren't responsible for the accident, how do you lose everything?

[212wrench]

My thought process is, since I own nothing, how can I lose anything?

[scottyp1973]

If you carry out your work in accordance with the airworthiness requirements and aren't responsible for the accident, how do you lose everything?

 

the insurance companys lawyers come take it away ...... if they are good lawyers.

you dont need to be guilty to get burned

[ray]

Hi, I'm working as a contractor under an federal incorporation, for an operator who endorse me with an ACA.

 

Are you working full time for this employer?

 

The 'contractor' bit is simply a compensation agreement between you and your employer.

Any maintenance release you do is under an ACA authority, so as long as you are certifying as a representative of the AMO, the liability is with the AMO.

[sharky75]

Are you working full time for this employer?

 

The 'contractor' bit is simply a compensation agreement between you and your employer.

Any maintenance release you do is under an ACA authority, so as long as you are certifying as a representative of the AMO, the liability is with the AMO.

 

 

That was my understanding before, but as the lawyer told me, the ACA, AMO and other aeronautical consideration don't have any power under a civil lawsuit, as the Civil Code is a provincial jurisdiction and even if you did everything IAW, you could be liable as being involved in the aircraft maintenance. I'm just letting other AME know about the risk, and unless the AMO is covering your company under it's own insurance, you might get some surprises in a civil lawsuit. The devil is in the details ...

 

Most of the cases that where in court, the AMO insurance company was the pursuant, not the victims/injured lawyer.

[sharky75]

If you carry out your work in accordance with the airworthiness requirements and aren't responsible for the accident, how do you lose everything?

 

The problem is the fact that you have being involved in the maintenance, that you endorse all other work that have being c/o before, and that your name is the last on the maintenance release. Even if you did everything IAW, they will try to get you responsible, and where are you going to find the 25 000$ in lawyer fee to defend yourself ,,,

 

That is why a liability insurance come handy, as they will settle out court for the amount of the coverage.

[Lunchbox]

Even if you did everything IAW, they will try to get you responsible, and where are you going to find the 25 000$ in lawyer fee to defend yourself ,,,

 

I can understand that the upfront cost of legal fees can make things difficult, but in the end if you're declared innocent, wouldn't the legal fees be paid by the other side?

 

I'm not asking these questions to be a pain. I'm honestly curious.

[Lunchbox]

the insurance companys lawyers come take it away ...... if they are good lawyers.

you dont need to be guilty to get burned

 

So even if we do our work IAW everything and don't **** anything up, how can they burn you?

[helidude]

Funny how this subject comes up every year!

 

Getting named in a lawsuit has nothing to do with weather you did your job 100% by the book or not. The lawyers will throw mud at the wall and wherever the mud sticks, that's who ends up paying.

 

Being ACA's with an AMO has zero to do with being covered under their insurance policy. Their insurance covers their employees only unless stated otherwise. You have to specifically ask to be covered. We do this for some of our contract engineers.

 

If you are a contractor (You invoice under an incorporated or limited company), you are not automatically covered by their insurance company.

I was required to attend an examination for discovery a few years ago for a lawsuit relating to a 2003 helicopter accident. One of our engineers and my self were contractors at the time of the accident and about 2 hours in the examination, the defendant's lawyer found out that we were contractors and he got a big grin on his face and made a comment to the effect that we were going to be named in the lawsuit as well.

The case was settled out of court before this could happen but our contract engineer still had to spend many thousands of dollars for legal representation for an examination of his own. Our company paid his expenses anyways but the point is, we were under no legal obligation to do so. Let me tell you, those lawyers are good at making you feel like a piece of shiiiiiiite! It will make you want to quit aviation and go clean toilets for a living!

I'm no legal expert but the way our lawyers explained it goes something like this: As a contractor, you're on your own unless you have a written agreement with your operators' insurance company. If you are named as a defendant weather you are guilty or not of any kind of negligence, your personal assets are probably not going to be affected but you still have to get a lawyer to defend yourself. That's expensive. If the case settles out of court as they usually do, then you'll probably be left to cover your own legal expenses.

The only way to be 100% protected is to be an employee.