LLC aircraft ownership

[Wiley]

Along with being sole partner in LLC and operator of the aircraft, you would also be the builder, which always gets drug into the lawsuits with certified aircraft as usually having the deepest pockets, whether the builder has anything to do with an accident or not. I tend to agree that an LLC might look good at first glance as a way to limit liability, but there are so many other levels of involvement that it would provide pretty limited protection.

[dholly]

@Wiley - In the case of my Kitfox I am not the original builder, so I got that going for me at least.

Amid the legitimate liability concerns we face, I think it's important to understand that plaintiffs do have burden of proof. A kit assembler will normally have product liability exposure only when a plaintiff can prove (not just allege) he/she was negligent in building the aircraft. I realize this won't necessarily preclude a lawsuit but I suspect it effectively limits the potential for being dragged into a financially devastating suit as a peripheral plaintiff. As a result (and I acknowledge I don't stay at Holiday Inn and may be complete wrongly in my thinking), I actually have less concern about product liability flowing to me either as original kit assembler (providing I followed the manual, add the necessary warning placards, etc.) or intermediate owner, than the operating liability associated with PIC in the event of an accident. HERE is a good discussion of the liability issues for experimental aircraft owners. FWIW, I have presented or been presented with a Liability Release Agreement when selling or buying an experimental kit or flying plane both as/from a builder or intermediate owner.

@Andrew - As you know, state law has a large enough impact to effect one's decision regarding personal vs. LLC aircraft ownership, so there is no one-size-fits-all lesson here. I have the question of which ownership structure, if any, is preferable in to my insurance co. They might find benefits in mounting defense of a NY insured when an LLC is in place, I dunno. If they do express a preference, I'll report back. If they don't and no one chimes in with a definitive negative, I'm inclined to add the extra layer of protection LLC ownership may offer. $100 LLC setup cost is chump change and, if for no other reason, had it proved completely ineffective it would not be so commonplace for owners of certified planes.

@Slyfox - Do what you want, including trying to rationalize your own actions, but in reality everyone's situation, risk tolerance and priorities are different. One's business may be more than adequately protected, but they may also have additional or substantial personal assets at risk, not in trust (because they choose not to live under a rock outside of business ). If the loss of those personal assets would either be financially devastating to their family or, at the very least, cause a severe and lasting hardship absence the liquidation of business assets, why would they NOT want to protect them as best as humanely and legally possible? I realize it's impossible to eliminate ALL aviation related liability but simply being prudent doesn't equate to crawling under a rock in my neighborhood. Again, I can appreciate your comments but, personally, I've always found no harm in trying to head trouble off at the pass whenever possible which is why I broached the subject.

thanks all

[Slyfox]

Just trying to throw examples out here.

But getting back to the issue, yes, protect yourself by all means, have insurance and fly safe. I myself find that taking people up for rides is the most liable part of flying, so I won't do it. I have to much to loose. As far as doing something that can tear your life as you know it away I put out the fact that driving the auto is in my opinion the highest risk there is. I can kill someone on the ground so much easier in my truck than I ever could in the airplane, that is with me as sole occupant in the aircraft. I love the fact that my airplanes are white, I never get people over at my airplanes and therefore no one wants rides. I'm left alone. I'm a happy camper. Sometimes I get a little down because there is a crowd at the airplane next to me or people just walk past my aircraft, but in the end, I don't have people asking me to do what I don't feel comfortable with. In short I'm a camper. I love to fly and I do that by myself. For one, I would feel real bad if I had someone flying behind me and end up running into a cliff or something because they can't handle the type of flying I do. So again, I fly for myself and feel this is the best thing to do.

[dholly]

Yes it is sad about carrying passengers, there are times they come in handy... pushing back into the hanger... washing, waxing... hehe. 20 yrs ago, in the Oct 1990 Kitfox Owners Newsletter, Denney Aerocraft recommended and even provided a copy of a passenger liability release.

I'm sure owner/pilots feel safer taking their own along as passengers, but after an incident involving two best buddies in my group proved, the insurance co's are ultimately in control. In their quest for money they will have very little regard for the wishes of immediate families involved. Very ugly scenario that added a great deal of emotional distress to an already sad event.

[dholly]

I rec'd a reply from the ins. agent that reads in part:

Using an LLC vs. individual name as the policyholder will not change the premium. It can however, limit some of the extra coverage provided by some policies. For example, some non-commercial policies extend your liability coverage to your use of non-owned aircraft if the named insured is one individual or individual and spouse. However, when the named insured is a company name, then this coverage extension only applies if the insured aircraft is down due to servicing, repair, or loss. However, with experimental aircraft many of those extra or extended coverage are not normally included so from an insurance standpoint it’s not much of an issue. Many aircraft owners are registering their aircraft in some sort of company entity such as an LLC. I’m not an attorney but the motivation is to provide another layer of protection as well as possible tax advantages. Your attorney or accountant may be the best to answer legal advantages or tax advantages.

Looks like ins. carriers could care less how you register your E-AB.