Associated Aviation offers, through a number of carriers, the Golden Wing policy for owner-operators of private business and pleasure aircraft. The policy provides liability coverage for injury to persons on the ground, as well as passengers; medical payments coverage for passengers; and physical damage coverage for damage to the aircraft.

2. CONTACT Mr. Steve Gormley Vice President and Director of Underwriting Administration Associated Aviation Underwriters 51 John F. Kennedy Parkway Short Hills, NJ 07078 Phone: (973) 379-0987 Fax: (973) 379-0806

3. UNDERWRITING GUIDELINES

The company does not publish underwriting guidelines, as submissions are evaluated on a case-by-case basis.

4. AVAILABILITY OF COVERAGE

All states.

5. DEFINITIONS

The policy contains one definitions section, that applies to both property and liability coverages. The following terms are defined:

A.     Aircraft—includes the owned aircraft described on the declarations and, under certain conditions, any temporary substitute, non-owned, or newly acquired aircraft. In addition to the aircraft, the “propulsion system and equipment usually installed in the aircraft” are part of this definition. These items are covered while:

     1. installed on the aircraft;

     2. temporarily removed from the aircraft;

     3. removed from the aircraft, awaiting replacement.

     The final items covered as part of the aircraft are tools and other equipment specially designed for the aircraft.

B.     Bodily injury—as in most other liability policies, the term includes injury, disease, sickness, and death. Mental anguish is also part of bodily injury.

C.     Disappearance—missing and not reported for sixty days after a flight begins.

D.     Federal Aviation Administration—the United States agency and any other similar organization in other countries.

E.     Flight—begins with take-off and ends when the plane has completed its “landing roll.” Landing roll is not defined in the policy, but it appears to mean when the aircraft has slowed enough at the end of the runway to begin movement toward the terminal or hangar.

     If the aircraft is a helicopter, a flight begins when the rotors start to revolve and ends when they stop revolving.

F.     In motion—any time the plane is moving under its own power or from momentum generated by its own power. A helicopter is in motion any time the rotors are rotating.

G.     Insured—in addition to the named insured anyone using the insured's aircraft is covered. Similar to the “Family Auto Policy,” this aircraft policy requires a permissive user to have the named insured's permission to operate the plane and that the use be “within the scope of such permission.” Other persons or organizations are insureds under the policy if their liability arises out of the named insured's acts or omissions.

     Not insured under the policy is anyone connected with the “manufacture, maintenance, repair, or sale of aircraft engines,” including their component parts. Others not covered include anyone connected with any airport, hangar, flying school, or flight service, if the occurrence arises out of such activity. There is also an exclusion of fellow employees. Finally, the owner of an aircraft being used by the insured is not covered.

H.     Medical expenses—the amount spent for medical, surgical, etc. services. Included are hospital, ambulance, nursing, and funeral services.

I.     Named insured—the person or organization named on the declarations.

J.     Occurrence—as with other liability policies, an occurrence is an accident or repeated exposure to similar conditions, causing bodily injury or property damage. Also as with other liability policies, this one does not cover damage or injury that is expected or intended by the insured. However, “efforts to prevent dangerous interference with the operation of the aircraft” are considered an occurrence.

K.     Partial loss—any physical damage loss that is not total.

L.     Passenger—anyone in, on, or boarding the aircraft for a flight; or anyone leaving the aircraft after a flight.

M.     Physical damage—is only direct damage to the aircraft. It does not include loss of use or diminution of value.

N.     Pilot in command—is responsible for the operation and safety of the plane during flight.

O.     Premises—parts of an airport—other than those rented to the insured—where aircraft are stored or parked.

P.     Property damage—as in the commercial general liability policy, property damage is both direct damage to property as well as its loss of use. Tangible property is also covered for loss of use, even if it suffers no direct damage.

Q.     Total loss—damage, including theft, where the cost to repair will equal or exceed the insured value of the aircraft.

6. PROPERTY

LIMITS AND DEDUCTIBLES AVAILABLE. Again, these items are decided on a case-by-case basis. Note that the policy calls for two different deductibles: one for when the aircraft is in motion; a second for when the aircraft is not in motion.

INSURING AGREEMENT. The policy contains three insuring agreements to pay for “any physical damage:”

A.     All risk basis—includes disappearance.

B.     All risk basis, not in flight—covers the plane when on the ground, but does not include fire or explosion following a crash.

C.     All risk basis, not in motion—covers the plane while standing still, but again does not include fire or explosion following a crash.

DEFINITIONS. See #5, above.

WHO IS INSURED. The owner of the aircraft and any loss payees listed on the policy.

WHAT IS INSURED. The described aircraft and any newly acquired aircraft, reported to the insurer within thirty days. The coverages for the new aircraft are the same as those for the described aircraft with the greatest passenger capacity. The new plane is valued at the actual cost to the insured, up to 150 percent of the highest value currently insured.

PERILS. As the property is covered on an all risk basis, coverage is defined by what is excluded.

EXCLUSIONS. The following exclusions apply to the physical damage coverage:

A.     Damage to tires unless caused by fire, theft, or vandalism.

B.     Wear and tear; deterioration; mechanical or electrical breakdown; failure of equipment installed in the aircraft.

     However, these exclusions do not apply if such damage occurs at the time of a covered loss.

CONDITIONS. The following conditions apply to the physical damage portion of the policy:

A.     Total loss—the insurer pays the insured value less the deductible. After such payment, the insurer's liability terminates and the unearned premium is refunded.

B.     Partial loss—the insurer will pay up to the limit of liability the cost to repair the damaged property with material of like kind and quality. Labor for such repairs is covered at “straight time rates.” Included in cost to repair are transportation charges for new or damaged parts, or to move the damaged aircraft.

C.     Stolen property—if stolen property is recovered, the insurer may return it to the insured, paying only for any resultant physical damage.

D.     Deductible—the deductible does not apply to losses from fire, lightning, explosion, transportation, theft, robbery, or pilferage. However, the “in-motion” deductible does apply to losses from fire or explosion that occur as a result of the collision of the aircraft.

     The deductible applies separately to each aircraft insured on the policy.

E.     Damage by foreign objects that are ingested into an engine is considered “wear and tear,” and is therefore excluded by the policy. However, if such an incident is serious enough to require immediate repairs, the loss is covered subject to the “in motion” deductible.

F.     Damage caused by heat from the operation of an engine is “wear and tear.”

G.     Damage caused by the breakdown, failure, or malfunction of any component or part of an engine is considered mechanical breakdown of the entire engine.

H.     In the event of a physical damage loss, the insured has the following duties:

     1. Protect the aircraft from further loss.

     2. File a proof of loss within ninety-one days

     3. Assist with the transfer of the title to the insurer, in the event of a total loss.

I.     Appraisal—if, within sixty days, the insured and insurer cannot agree on the value of a loss, then each hires an appraiser and the appraisers select an umpire. The decision of any two of the three “shall determine the amount of loss.”

J.     Salvage—the insurer retains the rights to all salvaged property and the insured may not abandon property to the insurer.

K.     Automatic reinstatement—the insured value of an aircraft is reduced by the amount of any partial loss. As repairs are made, the insured value is automatically increased until the insured value is fully restored.

L.     No benefit to others—the insurance is not available to any carrier or bailee who may be liable for loss to the aircraft.

M.     Subrogation—the rights of recovery belong to the insurer and the insured must not do anything to prejudice those rights.

7. LIABILITY

LIMITS AND DEDUCTIBLES AVAILABLE. These items are decided on a case-by-case basis.

INSURING AGREEMENT. The policy promises to pay for bodily injury or property damage arising out of the insured's ownership, maintenance, or use of the insured aircraft. The policy also covers bodily injury arising out of any “premises” (see Definition “O”).

DEFINITIONS. See #5, above.

WHO IS INSURED. See #5-G, above.

WHAT IS INSURED. The liability coverages are divided as follows:

A.     Injury to persons excluding passengers.

B.     Injury to passengers.

C.     Property damage.

D.     Medical payments to passengers. Members of the crew may be added for an extra charge.

E.     Defense costs (outside the limit of liability).

F.     Other expenses incurred by the insurer; costs taxed against the insured; and post-judgment interest.

G.     Premiums on appeal bonds; up to $250 for bail bonds.

H.     First aid expenses incurred by the insured.

I.     All reasonable expenses incurred by the insured at the request of the insurer. J.     Use of substitute aircraft is covered for liability, while the insured aircraft is withdrawn from service because of “breakdown, repair, servicing, loss, or destruction.”

K.     If the named insured is an individual (or individual and spouse), the policy provides liability coverage for the use of nonowned aircraft, not furnished or provided for the insured on a regular basis.

L.     As with physical damage, the insured is provided with liability coverage for newly acquired aircraft.

M.     If the insured obtains a Department of Defense Certificate of Insurance DD Form 2400, the insurance requirements of that certificate are substituted for the provisions of this policy.

PERILS. As with the physical damage section, coverage is defined by what is excluded.

EXCLUSIONS. The following exclusions apply to the liability coverage:

A.     Liability assumed in a contract. An exception is made if the insured must sign a hold harmless agreement as a prerequisite to the use of any airport.

B.     Workers compensation—any medical expenses payable under a workers compensation statute are not payable by this policy.

C.     Damage to property in the insured's care, custody, and control. Two exceptions to this exclusion are:

     1. Personal effects of passengers, up to $250.

     2. Aircraft hangar or its contents, up to $5,000.

D.     Injury or damage caused by noise, including sonic boom.

E.     Interference with the “quiet enjoyment of property.”

F.     Pollution—there is no coverage for the “discharge, dispersal, seepage, etc.” of pollutants in or on an aircraft or that are contained in property in or on an aircraft.

CONDITIONS. The following liability conditions apply:

A.     Limit of liability, per person and per occurrence.

B.     Severability of interests.

8. GENERAL POLICY CONDITIONS

The following conditions apply to the entire policy:

A.     Other insurance—the policy applies pro-rata with any other applicable insurance. Temporary substitute and nonownership coverages apply on an excess basis.

B.     Duties in the event of a loss.

     1. Notice of loss must be submitted “as soon as reasonably possible.”

     2. Suit papers must be forwarded to the insurer.

     3. The insured must cooperate with the insurer.

C.     Financial responsibility laws—if the policy is certified as proof of financial responsibility, then it will provide the minimum limits required by law.

D.     Proof and payment of medical claims—anyone making claim for medical payments must notify the insurer in writing “as soon as practicable.” The injured person must also submit to physical examination at the request of the insurer. Payment under this section is not an admission of liability.

E.     Subrogation—applies to all coverages except medical payments.

F.     Action against the insurer—no action against the insurer may be taken until the insured's liability has been finally determined. Under physical damage, such action may not begin until sixty days after the proof of loss is filed and the amount of damage has been determined.

G.     Changes—knowledge by the agent is apparently not considered knowledge by the company. The policy says that such knowledge does not “estop the company from asserting any right” under the policy. The terms of the policy may not be changed except by endorsement issued by the insurer.

H.     Assignment—the policy may not be assigned to anyone else without the consent of the insurer. However, if the named insured dies or is judged bankrupt, the policy will cover the insured's legal representative.

I.     Cancellation—the insurer may cancel for any reason by giving a thirty-day written notice (ten days for nonpayment of premium).

J.     Declaration—the insured agrees that the policy was issued in reliance upon his or her representations and that the policy contains all agreements between him and the insurer.