Aviation Law (AVMG 5090) - Exam 2
Test Questions And Correct Answers
Rated A+ 2025 Updated.
True - Answer (T/F) There is no limitation of liability for your own torts.
True - Answer (T/F) The boss has the right to direct their employees but not the independent
contractors.
Insurance for workers who are injured on the job. - Answer What is Workman's
Compensation?
If the employee gets injured on the job, then they cannot hold you liable and sue you for the
accident. - Answer What is the benefit of having Workman's Compensation for your
employees?
- Spread the risk
- Minimize the risk - Answer What are the two basic principles of insurance?
- Liability = covers your liability for injuries and damage to others or their property.
- Hull = damage to your own aircraft. - Answer What are the types of aircraft insurance
coverages and their definitions?
- "All risks" (expensive)
- "All risks except flight" (cheaper) = can save possibly 50% of the usual bills to insurance.
- "All risks with motion" (cheapest) = parked and not moved for any reason whatsoever. -
Answer List and describe the three forms of Hull coverages.
- Current Market Value
- Stated Value - Answer What are the two types of Valuation?
It is on the responsibility of the owner to tell the insurance company what the current value is
for the aircraft. Any modifications made that might increase or decrease the value should be
, True - Answer (T/F) You cannot buy a policy for more than the value that is worth.
- Pleasure + Business = business does not include any other individual with regards to said
business except for yourself.
- Industrial Aid = aircraft usage can include transportation of business execs, employees, guests,
and customers, all with no charge gained.
- Commercial Except Instruction/Rental = excludes commercial flight instruction or rental of the
aircraft to other pilots.
- Limited Commercial = excludes carrying passengers or cargo for hire.
- Full Commercial = covers every use of the aircraft.
- Special Uses - Answer What are the six "Purposes of Use"?
- If the aircraft is destroyed for any reason, then the insurance company will pay back the loan
balance.
- Lien = any claim of a piece of property for payment.
- Will always be payed regardless of the presence of illegal activity by the recipient. - Answer
Describe Lienholder's Interest Endorsement.
- Aircraft Directives = FAR directives by which the pilot MUST adhere to with regards to their
aircraft.
- Special Flight Permits can be granted by the FAA to disregard an AD for a specific purpose upon
request by the pilot. - Answer What are Aircraft Directives and what can be used to be
disregarded by them?
- Additional coverage that kicks in after the original policy coverage.
- It's a lot of risk for a little amount of money. - Answer What is Excess Liability Coverage
(Umbrella Policy)?
- To pay up to the policy limits for losses incurred under said policy.
- To defend you in court at their total expense. - Answer What are your insurance company's
duties to you?
- Contracts where one party says to another that they will relieve them of all liability of a service
in exchange for said service.
Test Questions And Correct Answers
Rated A+ 2025 Updated.
True - Answer (T/F) There is no limitation of liability for your own torts.
True - Answer (T/F) The boss has the right to direct their employees but not the independent
contractors.
Insurance for workers who are injured on the job. - Answer What is Workman's
Compensation?
If the employee gets injured on the job, then they cannot hold you liable and sue you for the
accident. - Answer What is the benefit of having Workman's Compensation for your
employees?
- Spread the risk
- Minimize the risk - Answer What are the two basic principles of insurance?
- Liability = covers your liability for injuries and damage to others or their property.
- Hull = damage to your own aircraft. - Answer What are the types of aircraft insurance
coverages and their definitions?
- "All risks" (expensive)
- "All risks except flight" (cheaper) = can save possibly 50% of the usual bills to insurance.
- "All risks with motion" (cheapest) = parked and not moved for any reason whatsoever. -
Answer List and describe the three forms of Hull coverages.
- Current Market Value
- Stated Value - Answer What are the two types of Valuation?
It is on the responsibility of the owner to tell the insurance company what the current value is
for the aircraft. Any modifications made that might increase or decrease the value should be
, True - Answer (T/F) You cannot buy a policy for more than the value that is worth.
- Pleasure + Business = business does not include any other individual with regards to said
business except for yourself.
- Industrial Aid = aircraft usage can include transportation of business execs, employees, guests,
and customers, all with no charge gained.
- Commercial Except Instruction/Rental = excludes commercial flight instruction or rental of the
aircraft to other pilots.
- Limited Commercial = excludes carrying passengers or cargo for hire.
- Full Commercial = covers every use of the aircraft.
- Special Uses - Answer What are the six "Purposes of Use"?
- If the aircraft is destroyed for any reason, then the insurance company will pay back the loan
balance.
- Lien = any claim of a piece of property for payment.
- Will always be payed regardless of the presence of illegal activity by the recipient. - Answer
Describe Lienholder's Interest Endorsement.
- Aircraft Directives = FAR directives by which the pilot MUST adhere to with regards to their
aircraft.
- Special Flight Permits can be granted by the FAA to disregard an AD for a specific purpose upon
request by the pilot. - Answer What are Aircraft Directives and what can be used to be
disregarded by them?
- Additional coverage that kicks in after the original policy coverage.
- It's a lot of risk for a little amount of money. - Answer What is Excess Liability Coverage
(Umbrella Policy)?
- To pay up to the policy limits for losses incurred under said policy.
- To defend you in court at their total expense. - Answer What are your insurance company's
duties to you?
- Contracts where one party says to another that they will relieve them of all liability of a service
in exchange for said service.
