Author: Stuart Hope
As flight departments seek greater flexibility and cost-efficiency, the use of independent contract pilots has become increasingly common. While this staffing model offers operational advantages, it also introduces important insurance implications that must be proactively managed to protect both the company and its aviation assets.
1. Aircraft insurance: Pilot qualification and policy compliance
Most aircraft insurance policies include strict requirements regarding pilot qualifications and approval. When hiring a contract pilot, it's critical to:
- Ensure the pilot meets or exceeds the insurer's minimum standards.
- Require the pilot to provide a current and fully completed Pilot Experience Form and present this to your insurer for their sign-off prior to flight.
- Maintain documentation of the pilot's credentials, training and flight experience.
Failure to comply could result in coverage denial in the event of a claim.
2. Liability and risk transfer
Independent contract pilots aren't employees, so they typically fall outside the scope of workers' compensation and employer liability coverage. Employees covered by workers' compensation are barred from bringing a lawsuit against their employer for work-related injuries (the "Work Comp Bar"). Independent contract (IC) pilots aren't barred. To mitigate this risk:
- Require the IC pilot to carry their own workers' compensation insurance. Often, this insurance is cost-prohibitive for the pilot unless they're working for an fixed-base operator (FBO). Therefore, if possible, add them as a part-time employee to your own workers' compensation policy, giving you the protection of the Work Comp Bar.
- Consider adding the pilot as an additional insured on the liability coverage and waiving the right of subrogation concerning hull coverage on your policy for their pilot service on your behalf.
Final thoughts
Using IC pilots can enhance operational agility, but it requires careful attention to insurance and risk management. Flight departments should treat pilot contracting as a strategic decision — one that demands coordination, documentation and ongoing review to ensure safe and insurable operations. Reach out to your aerospace and aviation broker to help you steer the course on your particular situation.
