Dis­abil­ity and loss of li­cence

RISKSA Magazine - - Long -Term -

It is im­por­tant to dis­tin­guish be­tween dis­abil­ity and loss of li­cence as there is a lot of con­fu­sion and am­bi­gu­ity for clients. Smit says that in its true form, loss of li­cence is not a gen­eral in­come dis­abil­ity prod­uct such as a doc­tor or a lawyer might get. “It is spe­cialised and fo­cused on the med­i­cal of the pi­lot. If the pi­lot loses his med­i­cal or his med­i­cal is suspended for a pe­riod of time, then he can­not fly. This is of­ten not caused by the ac­tual dis­ease, but by the med­i­ca­tion used to treat the dis­ease,” says Smit. Hanafay ex­plains that Hol­lard will ap­ply a loss of li­cence clause, which means that if the client loses his avi­a­tion li­cence he is not cov­ered. How­ever, he said that the in­surer is cur­rently look­ing at re­view­ing the clause. The loss of li­cence clause also ap­plies if the pi­lot does some­thing that is against avi­a­tion law. For ex­am­ple, if the pi­lot is fly­ing a plane out­side of his li­cence, or if he is fly­ing un­der the in­flu­ence of al­co­hol. In­sur­ers would not want to cover a pi­lot mak­ing a con­scious choice to do some­thing he should not. “Ed­u­cat­ing clients is our big­gest chal­lenge – the num­ber of clients we come across who have im­pair­ment when they are un­der the im­pres­sion they have loss of li­cence in­sur­ance is shock­ing,” notes Smit.


Full dis­clo­sure is es­sen­tial, and this is why PilotIn­sure does not even make use of the in­surer’s ques­tion­naire dur­ing the un­der­writ­ing process, opt­ing to use its own com­pre­hen­sive one. Smit says that many in­sur­ance com­pa­nies of­ten don’t ask all the rel­e­vant ques­tions at ap­pli­ca­tion stage, and the most im­por­tant in­for­ma­tion is of­ten over­looked. “The ques­tion­naire will have their spe­cific ques­tions, but at the bot­tom it will al­ways say “Are there any ex­tra risks as­so­ci­ated?” A pi­lot might not re­ally un­der­stand what they want be­cause they are not look­ing at it from an in­sur­ance point of view,” says Smit. Bro­kers should also pre­pare their client for the po­ten­tial load­ings, ex­clu­sions, and de­ci­sions that can come out of un­der­writ­ing based on the client’s per­sonal risk ex­po­sure and pro­file. “The un­der­writer can only as­sess what some­one can put in front of them, and quite of­ten it is on pa­per, so it’s one- di­men­sional. Giv­ing a lit­tle bit more in­sight into the pi­lot, and what the pi­lot does, and the risks the pi­lot is ex­posed to, al­lows the un­der­writer to do a bet­ter as­sess­ment of that risk and of that pi­lot,” Hanafay concludes.

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