Speaker 1: 0:04

Hello and welcome. My name is Tom Lelio. I'm your ultimate jet guide and on this channel we pull back the curtain on private aviation, help you buy or sell that private jet with no experience necessary to get started. Today we're talking the exciting world of aviation insurance and you may not think that it's super exciting, but it could be very, super scary if you find yourself in a situation where you need it but you don't have it. And so to talk about all of this, I've invited the man, the myth, the legend.

Speaker 1: 0:37

Mr Matt White is with me today and Matt is the guy, he's the go-to. He's the company owner of BWI fly, which is actually where I get my ENO coverage from. Uh, his, his, his girl, jack is, uh, is amazing. She's a wonderful broker. That that's helped me and she also helps out. She's the one I recommend to clients when it comes to hey, I need insurance for my aircraft. Um, matt is also a YouTuber, so if you're interested in what he's talking about, you can get some more Matt in your life by subscribing to him on YouTube at BWIFly. I am subscribed to my other channel, but I'll go ahead and give you another sub right there. Sorry if it's a little embarrassing right there, but Matt welcome to the channel man.

Speaker 2: 1:23

Thanks for having me, tom, so excited to talk about everybody's favorite subject in the world aircraft insurance. I know you guys can't wait to talk about those.

Speaker 1: 1:33

Well, you know, it's interesting and fun to talk about when it happens to somebody else.

Speaker 2: 1:37

And.

Speaker 1: 1:38

I think that's what we're going to talk about. It's like seeing an accident on the road and you just have to look and see like, wow, what did those people do? So that's kind of what we're going to talk about. We're going to get right into some mistakes and we're going to gear this primarily towards professionals, towards brokers, people that are involved in aviation, not just owners, because we've already done a podcast for owners, which you can go check out on both my channel and Matt's channel. So today we're pulling back the curtain for brokers when it comes to aviation insurance.

Speaker 2: 2:07

Awesome, absolutely Happy to get into it.

Speaker 1: 2:11

I'll let you go. Let you go. We got four mistakes that we're going to talk about in the very beginning. Is that correct?

Speaker 2: 2:15

Yep, yep, cool, let's do it. So the first one is kind of what are the main gotchas that specifically kind of an aircraft sales broker should look out for insurance wise? And you know these are some pretty important points here. But there are a few, you know, major gotchas that I want to kind of go over that you want to be aware of, especially when you're transacting in aircraft. Number one is pilot approval. So if the buyer is planning to fly the aircraft themselves, especially if it's a turbine or a jet, they may not meet the underwriter's minimum requirements and I've seen deals fall apart at closing because the owner was assuming they could be approved and we didn't get a quote until the final hour before the deal was closing and it's too late and the deal falls apart. So pilot approval is a big one. We've got to get the pilot approved and that happens through insurance.

Speaker 1: 3:22

So, okay, pilot approval. So I own a jet in my world. I own a jet, I'm already approved, I have insurance, I went through you, I made sure everything was good to go, but now we need to relocate for closing, or maybe we close in Florida and the plane has to be delivered to New York, or something like that. If we don't know, if we haven't had these conversations, if we haven't talked to someone like yourself, the person picking up the plane may not be covered. Right, right, gotcha, okay, now you just said it right there. It's a huge risk. Is this illegal? If you don't have insurance on an aircraft, maybe we should let the brokers know whether or not is insurance required when it comes to aircraft.

Speaker 2: 4:05

Insurance is not legally required, except for two or three states. I think Minnesota is one of them, but the other 47 states do not legally require insurance. I think they should, but they don't right now don't require insurance. So it's not illegal. But on the insurance side, you know, you have your approved pilots and so this is. You know, you've given your logbook, all the information to your insurance broker, you got to prove you're a named pilot on the policy and then there's the open pilot warranty, right? So these are other pilots that if they meet the underwriters minimum qualifications, they can fly. They don't need to be named.

Speaker 2: 4:53

The number one reason why aircraft insurance claims get denied is because somebody was flying the airplane and they were either not named on the policy or they didn't meet the open pilot warranty. That's the biggest reason why I see aircraft insurance claims get denied. And it's so easy. It's less of a risk with jets and turbines, more of a risk with your Cessna 172s, 180s. You know, hey, let me let my buddy go fly around, the pattern, something like that. And then something happens and then there's no insurance coverage.

Speaker 1: 5:21

Would a bank or a lender require insurance for closing sometimes?

Speaker 2: 5:26

100%. Yep. If the aircraft's the aircraft finance, they're always going to require insurance. They're going to require, uh, that the aircraft is insured up to the whole value of the purchase price, and they're going to want to be named as an additional, as a lien holder on the policy and so in this case we're going to closing.

Speaker 1: 5:43

Maybe a buyer thought yeah, no problem, I can get insurance. But either they didn't get the insurance or, like you said, the guy that they hired to relocate the aircraft doesn't meet the open policy or isn't named on there, and so now we're just kind of stuck to the expertise as an aircraft broker in guiding your customers when they're buying an aircraft.

Speaker 2: 6:10

right, if you know that the deal is going to be financed, we're probably going to want to get insurance involved early. We're going to want to get them listed as a lien holder. We're going to want to get the whole value, you know, et cetera. If you know that the aircraft's going to be ferried, we're going to probably want to get the pilots approved and go through that process. And all that comes down to your expertise and your expertise working with an aircraft insurance broker together, um to make that deal successful.

Speaker 1: 6:33

Perfect, perfect. All right, let's go to number two. What's, what's gotcha? Number two Gotcha.

Speaker 2: 6:37

Number two is this is a big one. This is, you know, aircraft sales uh, one-on-one it's there. Probably should be a an insurance part of it, but it's misunderstanding how insurance quotes work. Um, insurance, specifically aircraft insurance carriers. They don't want to see the same aircraft, the same tail number, submitted by five different insurance brokers. Um, so this, this is a mental change from, like auto insurance.

Speaker 2: 7:07

You know you shop around everywhere and you know you're you're comparing every year, you're trying to save money. That's the complete opposite of how you want to, the approach you want to take in aircraft insurance, because there's like a limited number of underwriters and hundreds of thousands of submissions and when they get your aircraft and pilots, but specifically your tail number, but even your name and shirt, when they get that from four or five different brokers, they will shut down and they'll stop quoting it and they'll start declining it. They'll start ignoring it because they want, they want to see you with. You know they only want to see it one time and they want to give it their best effort the one time they do see it. So when an aircraft sales broker refers a client, you know if they refer a client to like two or three different brokers. They are actually hurting their customer because those two or three brokers are going to start shopping around. Aircraft sales brokers really need to find, like one, aviation insurance professional and stick to it a hundred percent.

Speaker 1: 8:10

I appreciate that Now for most. Let me ask you this question when a aircraft broker is looking for insurance brokers, is it kind of like some specialize in heavy, some specialize in light, some specialize in GA versus business app, or is the industry pretty small that if you're an aviation insurance broker you probably have places to go for all types of business?

Speaker 2: 8:38

Yeah, that's a great question. So it's very specialized. So, for example, I have a friend who owns an aircraft insurance agency and he specializes in insuring Comanches and Gyros. Like two planes, comanches and Gyros, that's it. And he can quote your 172s, your 180s and he can do a decent job on those, but he just really likes to specialize in in like two makes and models.

Speaker 2: 9:06

And so you're you're going to have, like your smaller brokers are way more specialized and your larger brokers, they, they will have people you, if they're, if they're a good larger broker that they will have agents that specialize in different things within that industry. Right, so I'll have somebody that specializes in jets and turbines, another one, I mean commercial. You know part 135 and part 91. And like we have people at BWI that just specialize in Alaska, we have an office in Alaska and that's all they do is aircraft in Alaska. It's a completely different thing and, yes, it's very unique and specialized. So me saying, you got to find one broker that you know that you can trust, but then they all specialize in different things. It's hard, um, but you definitely don't want to go find three or four and have them all shopping at the same time. That's, that is a recipe for disaster right there no, I I understand.

Speaker 1: 10:06

I appreciate that. Cool, all right. Wow, moving right along. What uh gotcha?

Speaker 2: 10:09

number three okay gotcha number three part 135 usage or future charter plans. This is a big one, especially when you're trying to offset the cost of buying a jet. Um, if, if one of your buyers thinks that they're going to put the jet on a charter certificate down the line, they should bring that up to you. Now, right, they need to let you know during the sales process, because part 135 policies insurance policies structured totally different than like part 91 or pleasure in business or anything like that. It's, it's a completely different type of insurance policy. Business or anything like that, it's a completely different type of insurance policy and you can't change the usage. Right, you can't bind a pleasure in business policy or part 91 policy and then, like six months later, say, hey, we're going to convert this to allow for 135 use. No-transcript.

Speaker 1: 11:29

Now if they're thinking about it, but it's more just like. You know, I had a buddy that you know said I should do this one time and maybe in like five. And they're not like super serious, like that's one thing, but like if you ask them point blank, like hey, what's the plan? And they're like, oh, you know, I'm probably going to buy it and then I'm going to put it on a one 35. That's a whole different scenario, right, totally different, yeah.

Speaker 2: 11:52

Different insurance policy, different underwriting, different questions. Everything's different.

Speaker 1: 11:58

Yeah, it's people. It's not like Airbnb. Jets are not like an Airbnb where you can just kind of throw the same you know policy on to, or the same financing, or the same whatever you know, understanding part 91, part 135. Um, it's why working with a professional broker lenders is super important. Okay, cool.

Speaker 2: 12:20

I like it. Yeah, let me ask you a question how many of your customers do you think plan to rent out, you know, or charter out a jet that they purchased, like? What's the percentage of that?

Speaker 1: 12:33

Of the phone calls that I get and people just shopping, and how many of those actually will bring that up? I'd say probably about 30%. You know, we'll say the reason I'm shopping is because I'm thinking of you know doing this thing, but of you know that's a very small number when it comes down to like who actually closes like out of my closings, probably 10 of them like one out of 10 you know end up putting it on a 135. So it's, it's, it's, but it's important, like you said, to have those conversations up front. That way you can guide everybody along the way and not waste time and really educate them. It's like okay, are you sure you want to do this Right? Is there a big jump in insurance premiums from a 135 versus a part 91?

Speaker 2: 13:23

A% Way more exposure for the insurance companies. You know insurance policies are always written on like how much risk is it right? How much exposure do they have out there on the policy? And when you have you know the aircraft doing different things, especially like a 135 versus a 91, the exposure level increases and therefore the premium is also going to increase. Is it like?

Speaker 1: 13:47

or triple, or 10 times.

Speaker 2: 13:49

I would say it's like 120 to 150 percent more. And you know, it all depends, depends on the usage, depends on the routes where we're flying, how many people, how many passengers, liability. You know all the value of the aircraft, all that stuff yeah, but if you?

Speaker 1: 14:08

but then I mean worst case scenario again we, you try to do 134 and a half right, you don't insure correctly and you saved yourself, you know 120 percent, you know for a couple of years, but now all of a sudden you have a catastrophic loss. Not only do you have the whole value if you're chartering your, your plane's at least worth a million dollars, um, but God forbid any, any lives were impacted, you know. As a result, I mean, then you're, you're, you're just completely sunk, all to save a couple thousand dollars, right.

Speaker 2: 14:39

You're putting your whole business and, if you're the business owner, your livelihood in jeopardy at risk if you don't have. If you don't have a policy and if the policy is not written correctly which is probably the second or third biggest reason why claims are denied in aircraft insurance is that the policy is not written correctly. But that's a different, that's for another day.

Speaker 1: 15:03

Great, I got a couple more gotchas. What else you got, matt? Okay.

Speaker 2: 15:06

My last one is lien holder and breach of warranty language. And I see this so many times you know, probably two or 300 times in the last 12 months. But if the aircraft we talked about this earlier but if the aircraft is going to be financed, the insurance policy has to reflect that perfectly right. It's got to have the correct lender name, the endorsements. Breach of warranty language any little mistakes here can delay funding for the aircraft and it can leave the lender exposed. So you got to make sure you know.

Speaker 2: 15:46

That's why in the process, as professionals, we have to ask these extra questions. You're buying an aircraft, that's why. That's why you know you're the professional buying aircraft. And then you work with a professional who does aircraft insurance. These are the questions we ask. We try and get the information out of like from the beginning of the of the whole process either buying or selling an airplane or getting insurance. You gotta, you gotta go through these questions and a lot of times, aircraft owners. You know they, they, they don't want to give, they don't want to answer these questions. And again, you know it kind of hinders us from being able to write the policy correctly and do our job. But this is a big one. You've got to get the lean whole, or breach of warranty language.

Speaker 1: 16:30

And I think this is the benefit of working with multiple professionals, so that if I have a level of trust with the owner and you have a level of trust, we can say like, hey, listen, you can come back to me and be like hey, tom, this is the answers I got.

Speaker 1: 16:46

I really need you to make sure that these are accurate and it's fleshed out enough, because I want to make sure he's covered. Now I can go back to the owner and be like, hey, listen, I know you might be worried about saying something that's going to impact you negatively or give you higher premiums or something like that, but we need this information X, y, y and z to make sure we fill it out appropriately and so you can kind of tag team it to make sure, at the end of the day, you know it's at the owner's uh, the client's, best interest. We're not just trying to shop for higher premiums like we see stuff happening 100. Do you mind sharing, uh and I know we will come back to kind of explain coverages and gaps in coverage and all that kind of stuff but do you mind sharing maybe some of some stories or examples where you've seen these gotchas happen in real life and what was the? What was the result of some of these mistakes that people have made?

Speaker 2: 17:38

Yeah, yeah, 100 percent. So you know, a lot of these mistakes or gotchas aren't, you know, realized until there's an accident or a claim. And then it's like, oh, we didn't do that, oh, we didn't add this, oh the policy doesn't reflect that, and now it's a big problem, right, and that's like. That's the whole reason. Like, I get excited about insurance. I know insurance. Everybody, you know, seems to hate insurance. But you know, and I totally understand it, but when, like, we can write something correctly, and then when there is an accident and you have insurance and we're like, nope, we're there, you're covered a hundred percent, that's the whole reason people buy insurance, right, and any of those mistakes that cause, you know, there to be a lapse in coverage or, you know, for the claim to get denied, that's, that's the kind of stuff that that no aircraft owner wants to go through, but you don't know that until it actually happens.

Speaker 1: 18:36

That. That must be a good feeling when you know you write the policy, you know obviously you get the premium, you get a commission, like that's a great feeling. But you know it's. It's yucky when someone calls you and says, hey man, I had a claim and here's what's going on. But it must be a really cool feeling after that call when you go back to the policy and you take a look and be like, yeah, you are covered, you know, because you did your job. You can go back to the owner and say, hey, listen, look, I did my job and yes, you are covered, and get them. You know what they deserve in that time of an accident. That must be kind of a cool feeling.

Speaker 2: 19:10

It is. And it's like you know, insurance is a scam until you need it, until it pays. You know, for your $1.2 million brand new Cirrus SR 22, right, cause you, you know you had an accident and a lot of accidents SR 22, right Cause you. You know you had an accident and a lot of accidents. They're not avoidable, you know, like some a good majority are, but some accidents, like you couldn't have avoided that flock of geese. You know, like there's there's a lot that happens that's outside of your control, and so you know, if you don't have an insurance policy just in case something like that happens, you know it's, it's, it's never. You know it's an ego hit.

Speaker 2: 19:49

Of course, whenever you ground, loop it or something, you know you're feeling bad. I should have landed that better, I should have done different, and it's like a double whammy when you go and you're like, and now I also don't have insurance coverage, like you feel devastated. That's not something we want, you know. And so one of the things we do at BWI specifically, so we have about 150 to 170 airplane crashes or claims a year, so about one every other day is reported to us by our customers and most of these are, like you know, prop strike, ground, loop, hangar, rash, right, you know these are not all fatalities and the thing we do is, because we know how important insurance is, we want to be there on the other side especially, like that's the whole reason of insurance.

Speaker 2: 20:36

What we do is we have a review process that the agent has to go through before they can activate a policy. It's called the bind review. It's like a step-by-step process, verifies everything, the name, pilots, open pilot, work, like everything on our side, and then, after we bound the policy, there's a separate third party we review our admin team does. It called the policy review and again it's a third party set of eyes reviewing the policy matches, the quote, matches, our system, line by line by line, all the way down to make sure it's perfect. Because, like I said, we do have people. Every other day somebody turns a loss into us and we've never had somebody where we're like there's no coverage. That's not a position we'll ever want to be in.

Speaker 1: 21:25

That's not. That's not a position that I'll ever want to be in. Huh, that's huge. That's I don't. Well, let's talk about this then. What does the claim status actually look like from a broker's perspective? So, you know, just walking somebody through, like what is the claim status? Is it pretty much, like you know, know, a geico claim where I just go on my app and I click on it or how does that kind of work? And yeah, like what is the claims? Like reporting the claim, but then, like what's the average on, like how long it takes for it to get worked out? Do they just send a check? Do they bring anybody out to confirm, like what's going on? Yeah, I'm kind of curious. I think it's a little bit different than like a car or a home or an auto claim.

Speaker 2: 22:07

Right, yeah, I can be happy to walk through that. So a couple of things. So, first of all, you know you have an accident and you know a lot of times aircrafts, the end of the runway, and now what do we do? Right, and the steps is number one, of course, passenger security and safety first, take care of the passengers, make sure medically. You course, passenger security and safety first, take care of the passengers, make sure medically. You know that's always the first priority, first concern Get everybody out of the airplane, get them safe, Get them off the runway. The second thing, the second step this is before you even talk to me or your insurance broker. The second step is documentation. So if you can take pictures of the accident, the wreckage, the aircraft, any pictures, anything like that, that's step number two. And then the third step, after those two, is to get your broker involved and let them know, and so there's a lot of different ways you can call us.

Speaker 2: 23:00

You can go online and submit a claim report and we have a process where this is monitored 24-7, 24-7, 365. So you're going to get a response from us, no matter what time you submit it you know holidays, weekends, all that stuff. When we get the response, the first thing is we want to collect as much data. What happened? Who was flying, time of day, what is the damage? What is the estimate? Do we think it's just a bent rudder? Do we need to rebuild the engine? Was it a prop strike? We want to know as much information as we can. The minimum is just like an accident happened phone number, tail number. You know somebody to contact, somebody for us to get back to. We don't, after we collect this data, we don't turn it into the insurance company right away. We look, we look at the data and we look at the accident and we pull up your file and your policy and your quote and we're going to do a quick five minute review. So so we're going to look at the whole situation. This is where we, you know our expertise is as your aviation insurance risk manager. This is where the expertise really comes in. So we're going to look at your file and we're going to say, okay, what do we think? You know the severity of the damages, what do we just ballpark estimate, how much is it going to cost to repair the aircraft? And then we're going to look at your file and we're going to come back if we can and we're going to advise you whether to proceed or not.

Speaker 2: 24:26

It's not an automatic thing that every claim gets turned in. It's hey, you know, this is some hanger rash. It might cost you $3,000 to $5,000 to repair this if our customer paid for it on his own. But then they're not going to have a claim on their record and they're turning let. But then they're not going to have a claim on their record and they're turning. Let's say they're 68, they're turning 70 in two years with a claim on their record. They won't, you know, be able to get insurance and so it's probably worth, like it's a judgment call. It's us advising If, if one of our customers wants to turn a claim in, a hundred percent we'll turn it. But this is our opportunity to advise our customers. Hey, this is the best course. This is what we've seen happen in a similar situation when you turn a claim in. Here's how it plays out. And we might get told hey, I just can't afford that. We got to turn it in. Great, we'll turn the claim in and that's we report it Once they get.

Speaker 2: 25:26

They get the report, they turn it over to an adjuster and the adjuster, like once we turn to the company company, turns it to get, handles it to, hands it to an adjuster and then the adjuster gets in contact with the aircraft owner and they start working through the whole claims process. Right, send me a copy of your logbook. Send me a copy of the picture of the aircraft, the accident, the incident, whatever. Usually they're going to ask do they have a repair shop in mind that is local, that can start getting estimates? I want to get estimates of the repair.

Speaker 2: 26:01

The adjuster's job is to analyze the situation and sometimes they will go out to accidents sites and look at aircraft. They can fly around and get to accident sites, depending on severity and everything that happened, but their job is to work with the aircraft owner and get the aircraft owner whole again and, if the aircraft can be repaired, get the aircraft owner whole again. And if the aircraft can be repaired, let's get it repaired? If it can't be repaired, how can we get that check out to them as soon as possible? So all the communication once we turn into the insurance company happens between the aircraft owner and the insurance company's adjuster and if there are any issues between the two of them, our customers can always reach out to us and we can get involved. We can talk to the insurance company and get involved as well.

Speaker 1: 26:49

That's huge. No, I appreciate that, because just giving brokers an overview of what the claims process looks like I think is important for them to know and to realize that, like you said, you know, having a insurance broker on their side can help save them from. You know broker on their side can help save them from inflated premiums or difficulty getting coverage in the future or how other people have handled it. That's really key. I know we're kind of running out of time a little bit, but I'd love to just kind of get into the brokerage side. As far as E&O insurance or what kind of coverage do you think jet brokers need to protect themselves in this wild west that we call private aviation?

Speaker 2: 27:24

Yeah, absolutely so. I'd love to break that down. So a couple of points here. There's kind of three main coverages in aircraft insurance, just so everybody knows. Number one whole coverage. Right, this is physical damage to the aircraft. Usually aircraft insurance different than car insurance it's written on agreed value, right? Car insurance is like depreciation and all that. Aircraft insurance is, like you know, my service is worth 1.2 million. It's insured for that If there's a total loss. Here's a check for 1.2 million, less than deductibles, right? So number one whole coverage. Different than auto insurance, aircraft insurance is a greed value.

Speaker 2: 28:03

Second coverage liability coverage. Right, this protects the aircraft owner from bodily injury, property damage that is caused as a result of the operation of the aircraft, right? So, passengers, people on the ground, damage to other aircraft, etc. And this is typically offered depending on the aircraft. You know, for your single engine land aircraft, a million dollars per occurrence is the typical coverage limit here and that's limited to 100,000 per passenger, you know. And of course, turbines, jets, all that. You can go up to 10, 50, 100 million in liability coverage.

Speaker 2: 28:45

So the second coverage is liability. And then the third is errors and omission. This is more so we're talking about errors and omissions coverage for brokers, management companies and part 135 operators. And so errors and omissions, when you think about it, like writ large it covers professional mistakes, right, writ large it covers professional mistakes, right. So like you give incorrect advice or you missed a deadline and it caused financial loss. So when you're advising, you know your aircraft buyers or you're managing their aircraft and if you make a paperwork or regulatory mistake, e&o protects you, protects you professionally Right. And that's what E&O coverage you know in a nutshell does and you know I definitely recommend it for aircraft brokers.

Speaker 1: 29:39

And is that the same coverage? So if I get E&O and someone comes to my office and they slip and fall in the hangar in my office like, does the E&O cover that as well?

Speaker 2: 29:47

No, that's premises liability. That's a separate coverage.

Speaker 1: 29:51

So as a broker, if I have an office, I would need other coverages for that sort of thing when I'm talking to people. Or what if I go to a pre-buy and I try to open the door and I kind of break the door doing a showing?

Speaker 2: 30:06

Yeah. So let me break down the three different situations. Oh, wow, Okay, Sorry, I didn't mean to, Because I'm thinking like risk manager, like hang on a second, I got to. You know we want to make sure. So the first one is you know, let's talk about slip and fall coverage, right, Premises liability. So if you occupy an office, right, as soon as you rent that office and you sign, you know, you sign the application or whatever it is to rent an office space the landlord's going to require you usually to have premises liability. So that's a general business coverage for anybody in the office. Slips and falls Pertains to aircraft brokers, everybody.

Speaker 2: 30:49

The next one is E&O coverage for aircraft brokers, 100%. You should have this if you are acting in a professional capacity, If you're representing yourself, as you know a professional and aircraft professional, that connotation is going to come with you know the liability of making mistakes and people are going to come after you if you don't have that E&O coverage and you do make a mistake. We're all human, we all make mistakes. It's going to, it's going to bite hard, it's going to hurt. So that's, those are the first.

Speaker 2: 31:24

Two are the first two. The third is you're walking around and you hit your head on an aircraft or a propeller or a wing or something, and there's a couple different ways to look at that. So the primary coverage on this is whoever owns the aircraft owns. That's whose insurance policy this is going it's going to. It's going to be a liability and whole insurance policy based on whoever owns the aircraft, right? So if you're in the middle of a transaction, you have a buyer and a seller. The seller probably insures the aircraft up until you sign the deal and the buyer becomes the aircraft owner. But up until that point it's going to go on the seller's insurance policy.

Speaker 1: 32:08

So if I'm showing the aircraft to a potential buyer and by my opening the door I break a mechanism on the door, now the guy's got to pay $10,000 to fix the door. I know that first is going to be paid for by his aircraft's insurance for the hull. The hull like what. You know that that piece of it's it can be. It can be it can go through there. But I imagine they're going to subrogate and try to go after me for having been the person responsible for breaking the door.

Speaker 2: 32:39

Now yeah, I don't, I don't think so. I mean they, they could, you know, they could litigate, subrogate against whoever they want to sure um?

Speaker 1: 32:48

is there coverage for me as a broker if I break somebody's plane? I guess is my question Not under airs and emissions insurance. Right. Is there any insurance that would cover if I break someone's airplane?

Speaker 2: 32:58

Yeah, yeah, but I mean it's always going to be. The primary is always going to be, you know, whoever owns the aircraft.

Speaker 1: 33:05

Sure, okay, I get that, they're getting. That's going to okay. Okay, gotcha, gotcha Um does insure. Do we can anybody get this ENO coverage that we're talking about here? Do you need to be an established broker or working with the brokers, like if I just am starting? You know, I found some random guy on YouTube that says he can, you know, pull back the curtain and help them buy and sell AV and private jets no experience for that. You know to get started. Be a private jet experience without you know to get started. Can I just go to you, matt?

Speaker 2: 33:32

and you hook me up with some. You know insurance. How's it work? Yeah, no, that's a great question. So you know insurance, as much as I recommend it, it's not for everyone it's. It's specifically designed for if you're providing a professional service or advice, right? So it's not for aircraft brokers, a hundred percent. But for you know, it doesn't apply to everyone.

Speaker 2: 33:52

If you want to get an E&O insurance policy, you typically need to be licensed, right? So you're a licensed broker, you're a licensed dealer, you're an advisor or you, or you're a charter company or you're an aircraft manager or some type of aviation consultant. Basically, like, you're in a role where you make professional decisions and you give professional advice and if you make a mistake, it could financially harm somebody else. So when you go to apply for E&O insurance, the insurance company is going to ask questions on their application. They're going to want to know what your experience is. Is this your first transaction? Have you been doing this for five years, 10 years? What is your experience? What is your history of doing this?

Speaker 2: 34:46

They're going to want to know what services you're offering, right, um? And they're going to want to look at if you have contracts or disclaimers or good risk controls in place. So what are your you know if you're an aircraft broker, what are your risk controls? Uh, as you manage that transaction right, do you have you know what contracts do you have? Do you have you know disclaimers on your email? You know what contracts do you have? Do you have you know disclaimers on your email? You know all that, all that fun stuff. You don't have to be in business like 10 years to get a good E&O policy. They just want to understand your business, understand your history and look at your. You know your risk controls.

Speaker 1: 35:24

Okay, okay, so so my disclaimers on my emails do they? Do they actually help me?

Speaker 2: 35:30

Um, they help but they're not bulletproof. So like if you in your email, if you add in like this is not legal advice, you know you're not an attorney, you know always consult with an attorney or something Um, what it does is it helps us set expectations for your customers and it does provide a little context if something goes sideways but it doesn't like. Those disclaimers don't eliminate your liability right, Especially if the client is relying on your advice and suffers a financial loss. If you gave them guidance that directly influenced their decision, like how to title an aircraft, how to structure ownership, whether it meets some FAA requirement, et cetera and that guidance is wrong, you could still be liable, whether or not you have the that makes sense, you're still there, tom.

Speaker 1: 36:39

Sorry, did I lose you? I thought I lost you for a second. Okay, so good. The emails do help. I'm glad to hear that. Well, hey, matt. Final piece of advice for aspiring brokers and insurance or do you just want to shout out your website? Tell us what you're up to and how people can find out more about you.

Speaker 2: 36:56

Yeah, final piece of advice is um kind of like we talked about in the beginning find an insurance professional, and specifically an aviation insurance professional that you, that you work, that you get along great with, that, you can trust and just work with one broker, right, don't get multiple brokers involved. Find somebody you can trust and you know, when you're acting as an aircraft broker, you're giving professional advice and you want to back that up with good working relationships on the insurance side and on the financing side, et cetera, et cetera. Um, that that's my one piece of advice. Get, find somebody you can trust. Um, and, and that's all I got.

Speaker 1: 37:37

That's awesome man. We'll definitely connect with Matt. He is somebody that you can trust. Like I said, uh, jackie's an amazing, uh member of his team and I anytime anybody asked me about aircraft insurance. Actually she's so good that I lost the listing because of her. And it was a good thing because he was like, if my insurance goes up, I'm going to list that you can sell it. If my insurance doesn't, then I still want the plane. And we got her involved. I think she ended up saving the guy like $1,100 or something like that. So so the plane. But that made us feel good too, because we're not in this to steal someone's airplane from them and make them sell it when they don't want to. We want people to be involved in aviation and it's a great testament to your team and the character of your team that they want what's best for the client at the end of the day. So you definitely have a great team. I hope more people will check that out.

Speaker 2: 38:29

Appreciate it. Thanks, Tom.