Posted by: Tom Chappell | February 9, 2010

Broad Form Policies – Voluntary Settlement

I will attempt to outline certain coverages that may be available to you on a broad form policy and define the purpose of each.

Voluntary Settlement or Guest Voluntary Settlement: Many, not all, insurance companies offer a coverage called Guest Voluntary Settlement or GVS. This little known coverage has been referred to as “admitted liability”.   It is considered to be a significant policy expansion and is usually made available by the better underwriters to the industrial aid risk (professionally flown corporate aircraft).  Just a note, we see less underwriter willingness to offer this coverage to owner-flown pleasure aircraft and commercial aircraft.

When added to your policy, guest voluntary settlement coverage is an extension of the liability coverage section.  In the event of a covered claim, the company can pay a sum to or for each passenger that is injured regardless of legal liability.  As a requisite to settlement, the named insured must request payment, the injured passenger must sign a full and unconditional release of liability, and the settlement amount must not exceed the stated GVS limit shown on the policy.

“ Unlike your liability coverage, the additional coverage under this endorsement applies to injuries covered by workers’ compensation, unemployment compensation, disability benefit or similar law.” (This statement is taken from the USAIG All Clear policy form.)

In short, guest voluntary settlement allows the latitude to offer a settlement for passenger injury without having to establish liability.

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