Protecting Yourself Against Liability

James Butler Helps Fractional Owners Curb the Risk of Their Shared Investment

Bethesda, Maryland • December 2008

In his latest “Inside Fractionals” column for Business Jet Traveler, Shaircraft CEO, James Butler, stresses the importance of understanding and protecting against the risks that come with owning a fractional share.

Butler advises, “[W]hen your aircraft is in the air, even if you’re not on it, you have exposure if there’s an accident.” He recommends ways that owners (and prospective owners) can protect themselves against the unexpected:

  • Negotiate the Liability Provisions in Your Contract: A provider’s boilerplate contract “will no doubt seek to limit its liability.” Careful review and negotiation of these terms up front can limit your liability, shifting more of the risk back to your provider.
  • Hold Your Fractional Share in a Limited Liability Company: Setting up a limited liability company (that’s in line with FAA regulations) to hold your share should shield your other assets.
  • Fly Under Part 135 Whenever Possible: “When you fly under Part 135, your fractional company is in ‘operational control’ of the aircraft (similar to a charter arrangement), whereas when you fly under Part 91, Subpart K, you personally are in operational control.”
  • Shift the Risk with Insurance: “Review the coverage offered by your fractional company to make certain you’re comfortable with the level and type of coverage as well as the financial strength and claims-paying history of the carrier.”
  • Invest with a Sound and Strong Provider: “Make sure…that your provider has a solid track record…and strong financial backing…to support its side of the risk equation.”

For more information about how to safeguard your fractional investment, download the full text version of this article below.

Business Jet Traveler: “Protecting Yourself Against Liability”

Download in PDF format (103kb)

Please Share