The February 6 collapse of the Dulles Jet Center roof under a heavy blanket of snow– and the estimated $300 million worth of corporate jets damaged or destroyed in the event–has raised questions about insurance liability.
First, is the damage considered an act of God? “Either it is an act of God or it isn’t. Once you make that determination then you make the determination of who’s financially responsible,” Jim Gardner, Logansville, Ga.-based aviation insurance broker and vice president of JSL Aviation, told AIN.
Gardner explained if the roof collapse is found not to be an act of God, such as a problem related to its construction, then the economic consequences can potentially fall on several entities such as the FBO owner, the architect, the builder or some combination. “This is not a trivial determination, as there are millions of dollars at stake. In all likelihood it is going to be a legal determination,” he said.
Several anonymous industry sources suggested there will be close scrutiny of the building construction. “It wasn’t built in an area where snow is a rare occurrence, so you can bet there will be a careful analysis as to whether the structure was architecturally sound. They’ll be asking if it was built to the standards required for that geographic area and whether or not there were faults in the materials, design or construction. Still, 32 inches of wet snow is a lot of snow,” he said.
If the loss is considered an act of God then it is likely the aircraft operator’s own insurance will have to cover it. “This is a case where your relationship with your own insurance company becomes important,” one insurance agent said. “An insurance claim is always a negotiable issue. A good relationship between the insurer and the insured can make all the difference when they begin settlement negotiations. A bad relationship could have the insurer strictly adhering to the wording of the contract, whereas a good, established relationship may see the insurer being more flexible in favor of the insured when it comes to the settlement.”
The airframe loss is a major aspect of the event but so too is the loss of use and diminution of value. Gardner explained every aircraft has a history and if it includes damage and structural repair that makes the aircraft worth less than one that has never been damaged. “You can be sure that will figure into any settlement for an aircraft that’s repaired and not written off.”