Hot Air Balloon Insurance:Hot Air Balloon Insurance:

A Brief Understanding of the Misunderstood

Beth Miller, VPIMC BALLOON AGENCY

Let’s discuss what Hot Air Balloon Insurance

is all about!

We will start at the BEGINNING…

(Always CALL YOUR AGENT to discuss your personal coverages)

A ‘DEC’ SHEET

LIABILITY

I (A)Liability Coverage

• LIABILITY COVERAGE will pay on behalf of the ‘INSURED’ all sums which the ‘INSURED’ shall become legally obligated (Liable) to pay as damages because of ‘BODILY INJURY’ sustained by any person, including any ‘PASSENGERS’ and ‘PROPERTY DAMAGE’ caused by an ‘OCCURRENCE’ and arising out of the ownership, use or operation of a scheduled ‘BALLOON’.

• I (A)Liability Coverage

– GENERAL AGGREGATE stated on a policy is the TOTAL LIABILITY paid during any ONE policy effective period. If or when the AGGREGATE is paid, the policy ENDS.

– COMBINED SINGLE LIABILITY LIMIT includes the PASSENGER LIABILITY LIMIT, but the PASSENGER LIABILITY LIMIT is NOT in addition to the maximum limit with a sub-limit policy (as is the majority of BALLOON insurance).

– PASSENGERS are limited to $100,000 PER PASSENGER (again on a SUB-LIMIT policy). Maximum number of PASSENGERS insured are listed on the DECLARATIONS page of you policy.

I (B)Medical Expense

1. Read your policy to see if the PILOT is covered under the MEDICAL EXPENSE coverage.

2. ONE YEAR limit of coverage from the date of the occurrence.

COVERAGE EXCLUSIONS:If you don’t read anything else,

Read the EXCLUSIONS!

Remember:

• What is not EXCLUDED is INCLUDED!

ENDORSEMENTS:

• How to CHANGE YOUR COVERAGE …or make changes TO your coverage

Homeowners Insurance

• Liability Exclusions as is related to your ballooning operation

3. Aircrafta. We will not cover bodily injury or property damage arising out of the

ownership, supervision, entrustment, maintenance, operation, use, loading or unloading of any type of aircraft, glider, balloon, parachute or other air conveyance and their facilities. We do cover model aircraft not used or designed for transporting cargo or persons. This exclusion does not apply to bodily injury to any domestic employee arising out of and in the course of employment by any insured.

4. Business. We will not cover bodily injury or property damage arising out of business pursuits or the rental or holding for rental of any part of any premises except…

OTHER INSURANCE..Who do you LOVE?

LIFE INSURANCEACCIDENTAL DEATH &

DISMEMBERMENTMEDEX

WHAT IS THIS COVERAGE?

HOW DOES IT WORK?WHY DID IMC PURSUE?

HOW WILL IT AFFECT THE FUTURE OF

BALLOONING?

Forms & Procedures to further Protect your Assets

PASSENGER WAIVERS/RELEASES

PASSENGER RELEASE / WAIVER

• What IS a PASSENGER RELEASE/WAIVER ??

• WHERE can I get one?

• I fly SPORT only..WHY do I need it??

• What if I am at a Rally or Event and they have their OWN waiver??

RELEASE CHECKLIST– LEGIBLE: releases in all capital letters maybe harder to read

– SIZE and TYPE of PRINT: minimum ‘ten point font’ – bold type preferable

– CLEAR and EXPLICIT: DO NOT mince words

– UNAMBIGUOUS: no words or phases with two or more possible meanings

– SIMPLE: short paragraphs and sentences, to the point

– SHORT – try and keep your release to one page; DO NOT ‘bury’ it inside another document

– UNDERSTANDABLE to a ‘LAY’ PERSON: ask your teenager to read and explain it

– TIME and OPPORTUNITY to READ: present the release days; or, at least, hours prior to the flight

– Suggestions Provided by:

Gary Bruce Eaton: CA Attorney/Balloonist

RELEASE CHECKLIST con’t– NO ADVERSE STATEMENTS: “you can still sue me” ; “it’s meaningless”; “my

insurance company/attorney makes me use this form” ; ….NO JOKES…etc.

– FREE of FRAUD or MISREPRESENTATION: stating you do not have any insurance…etc.

– FREE of DURESS: Economic,Mental,Physical(ie; Opportunity NOT to fly-FAIR REFUND policy-”we dare you to go up”

– NOT AGAINST PUBLIC POLICY:Common Carrier=Strict Liability

– DESCRIPTION of the types of RISKS: “INJURY or DEATH” “dangerous terrain” (was the cause of the accident a ‘foreseeable hazard that was contemplated by the release form??)

– SPECIFIC IDENTITY of PARTIES: RELEASED PARTY///RELEASING PARTY – name the owner/operator, pilot,crew,sponsor,event organizer///passenger

The ‘RELEASE of LIABILITY and ASSUMPTION of RISK’ Agreement is a very serious legal document and should be accorded that respect in its preparation and it’s execution. Suggestions Provided by:

Gary Bruce Eaton – CA Attorney & Balloonist

 HOT AIR BALLOON

RELEASE OF LIABILITY & ASSUMPTION OF RISK I,_________________________ _____________________ ____________________________________,__________________________ Print First Name Print Middle Name Print Last Name I hereby acknowledge that I have VOLUNTARILY applied to participate in hot air ballooning recreational / sporting activities. I understand and I am aware that hot air ballooning is a hazardous activity. I understand that hot air ballooning and the use of ballooning equipment involves a risk of injury or death and that there is a possibility that I could be injured or killed while participating in this activity. I also understand that the property upon which the take-off or landing of the balloon is to occur may not be in a safe condition. I hereby agree to, and expressly assume the risks of injury or death while engaged in hot air ballooning recreational/sporting activities, whether during the preparation, take-off, flight, landing, pack-up or travel to or from the take-off or landing areas, including ground transportation. I recognize that the pilot of the balloon is in full and complete charge and control of the balloon and is solely responsible for all decisions made concerning all things or persons in or connected with the balloon on the ground or in the air. I hereby irrevocably release__________________________________________, his/her/their/its employees, balloon crew, sponsors, agents successors, heirs, assigns, affiliates and legal representatives {“Released Parties”} from claims, rights, demands or actions for ordinary negligence which I or my successors, heirs or assigns may have against the Released Parties in connection with the ballooning activities . I agree not to make a claim against or sue the Released Parties for injuries, death or property damages relating to the ballooning activities and /or the use of the balloon equipment, even if any injury, death or damage is caused to me or my property is due to the ordinary negligence of the Released Parties or the dangerous condition of any property upon which the ballooning activities may take place. I further understand and agree that this release extends to claims for ordinary negligence, known, unknown, suspected or unsuspected, arising out of the ballooning activities and I hereby expressly waive rights regarding such claims. I hereby agree to and accept the terms and conditions of this Release of Liability and Assumption of Risk Agreement. This Release of Liability and Assumption of Risk Agreement constitutes the final and entire agreement between the Released Parties and the undersigned concerning this subject matter. In the event of litigation with respect to the ballooning activities or this agreement, the prevailing party shall be entitled to recover an attorney fees and the costs of litigation. I certify that I am eighteen (18) years of age or older and that I have no medical or mental condition that prevents me from participating in the ballooning activities. {In the space below, please print the following: “I have carefully read this Release and I fully understand it.”} “I ______________________________________________________________________________________________”  Your Initials____________   ( SAMPLE PROVIDED BY: GARY BRUCE EATON: CA ATTORNEY/BALLOONIST)  ____________________________________________________ / ______________ Signature Date _____________________________________________________ Print Full Name

Reality of our Society

WHAT ELSE CAN I DO???

WHAT IS A WRITTEN

PASSENGER PRE-FLIGHT BRIEFING?

HOW IS IT DIFFERENT FROM A WAIVER/RELEASE?

PASSENGER PRE-FLIGHT BRIEFING - SAMPLE 

1.     DO NOT SMOKE in or near the aircraft. Propane is Explosive! 

2.     Stay clear of the inflator fan. 

3.     Do not enter the basket until the Pilot invites you to do so & enter the basket carefully 

4.     Do Not Touch the fuel hoses, propane tanks or aircraft instruments. 

5.     Keep hands and arms inside the basket at all times. 

6.     LANDINGS MAY INCLUDE HARD, FAST, ROUGH IMPACT WITH THE GROUND-Follow Pilot instructions!

7.     Do Not EXIT the basket until the Pilot directs

8. Please read and sign the Release it, IF it is acceptable to you.

9. ECT….. ECT……ECT…

You may be invited to participate in “ground crew operations” [such as balloon inflation, deflation, and pack-up].

You may decline the invitation at your sole discretion. The purpose of the invitation is to permit you to have a “hands-on” experience if you chose.  

I understand all of the above and have no questions: Date:

Signatures: Passenger ____________________________________

Passenger __________________________________

Crew ___________________________________

_ Crew ____________________________________ Sample By : Gary Bruce Eaton

WHOSE FLYING??

Who Can Fly My Balloon??SPORT & PLEASURE

• Open Pilot Warranty : – Any person is covered to fly your balloon IF flying SPORT

& PLEASURE ONLY, as long as the person acting as PIC has a current and valid license and has YOUR permission to fly the balloon.

(If not with IMC - Check with your AGENT for your definition!)

– **CAUTION – any claim that happens on YOUR BALLOON whether or not YOU are involved, YOU and YOUR POLICY WILL ACCEPT RESPONSIBILITY!!**

Who Can Fly My Balloon??COMMERCIAL

• Named Pilots:– Any PERSON named as PIC of a COMMERCIAL

FLIGHT must qualify (under the policy regulations) and be named on the specific policy for coverage to be in EFFECT for the specific flight.

– *PLEASE… CALL YOUR INSURANCE AGENT WHENEVER YOU HAVE A QUESTION ABOUT HOW YOUR COVERAGE WORKS – READ YOUR POLICY THOROUGHLY AND ASK QUESTIONS BEFORE YOU FLY!!!***

Claim Examples: including an Additional Insured

Added to the Coverage

Remember, these are worse case scenario EXAMPLES:

IMC has been writing Hot Air Balloon insurance for 26 years, to date we have not

witnessed any of these scenarios!

FIRST CASE:Insured has $100,000 Passenger Limit

Court Judgement = $90,000

Example #1: The Courts say the AI is NOT negligent:

The Insurance Co pays $90,00 on behalf of Insured

Example # 2: The Courts say the AI is 5% negligent:

The Ins CO pays $85,500 on behalf of Insured

The Ins Co pays $4,500 on behalf of AI

Example # 3: The Courts say the AI is 50% negligent:

The Ins Co pays $45,000 on behalf of the Insured

The Ins CO pays $45,000 on behalf of the AI

SECOND CASE:Insured has $100,000 Passenger Limit

Court Judgement = $200,000

Example # 1: The Courts say the AI is NOT negligent:The Ins Co pays $100,000 on behalf of the Insured(The Insured owes the Claimant $100,000 out-of-pocket)

Example # 2: The Courts say the AI is 50% negligent:The Ins Co pays $50,000 on behalf of the InsuredThe Ins Co pays $50,000 on behalf of the AIThe Insured AND the AI each owe the Claimant $50,000

NOT PRETTY – NEVER HAS HAPPENED TO DATE!

HOLD HARMLESSAGREEMENTS

• HOW DO THEY AFFECT MY COVERAGE?

• WHY DO EVENTS ASK ME TO SIGN THESE?

• ARE THEY BETTER THAN ADDING AN ADDITIONAL INSURED???

Summary of Serious Summary of Serious Accidents and Accidents and

High Dollar Claims:High Dollar Claims:

IMC Pilots Insured by License Type

% InsuredStudent License 4%Private License 24%Commercial License 72%

Balloons Insured by SizeSize % Insured % of Claims

<=AX7 50% 43% AX8 45% 47% AX9 4% 8%>=AX10 1% 2%

Data Provided by IMC Balloon Agency 2007

Claims by Type of Flight

Student Instruction 2Balloon Events 41Sport and Pleasure 13Commercial 44

Why do Events have such a high incident of claims??

What is the common denominator for the majority ofaccidents?

Data Provided by IMC Balloon Agency 2007

What does the Insurance Company look for AFTER an accident??

OrWhat might VOID your Coverage!

THANK YOUFlorida Safety Seminar!

“Gentle Breezes and Soft Landings”