ARSA To Offer Liability Insurance To Aircraft Repair Station


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ARSA To Offer Liability Insurance To Aircraft Repair Station

By Bill Goldston

June 28, 2010 – The Aeronautical Repair Station Association (ARSA) and Polaris Enterprise Group unveiled an important new insurance option for the aviation maintenance industry.

Aviation Alliance Insurance Risk Retention Group (AAIRRG) which ARSA and Polaris have been working jointly to establish and has received its insurance license, known as a certificate of authority from the State of Montana. AAIRRG will provide products liability insurance exclusively to repair stations which are ARSA members.

As a small subset of the aviation insurance market, repair stations have often been lumped with more high-risk elements of the aviation industry when seeking insurance.


This has led to higher premiums representing an average of all aviation risk rather than that necessary solely for repair stations based on a historic analysis of accident and safety data. Because AAIRRG provides insurance only to repair stations, it will be able to offer coverage at well below market rates.

"AAIRRG offers the chance for a repair station to take greater control of its insurance costs," said AAIRRG President Bill Perdue. "For the first time, repair stations will have insurance designed specifically for them which takes into account our industry’s outstanding safety record. We’re no longer going to be lumped in with the rest of the aviation industry."

"This is excellent news for our members," said ARSA Executive Director Sarah MacLeod. "This unique partnership with AAIRRG represents an opportunity for our members to lower their operating costs through control and ownership of their liability insurance."

AAIRRG differs from an ordinary insurance company in that it functions as a risk retention group (RRG). An RRG consists of independent companies that assemble to create and fund a licensed captive insurance company, which operates under the Federal Liability Risk Retention Act of 1981 and is able to write common commercial liability insurance for its members. Each insured member is an owner of the RRG and receives shares in the RRG and is eligible for financial distributions from potential underwriting profits.

"Getting AAIRRG off the ground has been a challenging and rewarding experience," stated Polaris Enterprise Group President Cameron R. Crebs. "In this time of economic difficulty I look forward seeing AAIRRG provide ARSA members a valuable and rewarding insurance alternative."

ARSA is an Alexandria, Virginia-based trade association that represents aviation maintenance and manufacturing companies. The association has a distinguished 25-year record of advocating for repair stations and providing regulatory compliance assistance to the industry.


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