With regard to liability insurance, answers to the question of “How much is enough?” have always been something of a mystery. But for shareholders in a fractional program, the answers are compounded by the concept of shared ownership.
According to Carol Tyrrell, an account executive with Van Nuys, Calif.-based broker NationAir Insurance, many fractional owners are unaware that the single-occurrence, primary-liability policy provided by the fractional operator is shared by the fractional owners. A $200 million liability policy, said Tyrrell, does not protect every shareholder in a particular airplane for up to $200 million. The apparent conclusion is that with regard to a fractional aircraft owned by 16 shareholders, each with a one-sixteenth share, the policy provides each individual with a maximum of only $12.5 million in liability coverage.
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