(de)Risky Business

(de)Risky Business

“PART 1: Our industry is massively under-insured. Fact.”

Do you buy, sell or repair aircraft parts?

Do you transport high value assets?

Do you warehouse & distribute inventory?

If the answer to any of these questions is yes, then chances are you are not as well protected as you think you are!

For the last 3 years LGM Aviation has worked closely with Lochain Patrick Insurance Brokers to de-risk our aviation industry partner’s exposure and to develop cutting edge digital solutions to day-to-day insurance related issues within our industry.

LGM understand the nuances and demands of our industry like no other – because we are a parts trading firm ourselves. Lochain Patrick is a Lloyds accredited insurance broker who are one of the UK’s leading independent risk management firms for the worldwide Marine, Aviation and Transit markets, with over 30 years specialist experience.

Together, we have provided engine transit coverage, general liability insurance and bespoke third-party contractor coverage solutions to organisations of all shapes and sizes. We have found that most organisations we speak to are under-insured or not covered as well as they think they are.

In this three-part series focused on Insurance, we share what we have learned from supporting our customers within 3 core areas: Buying, Selling & Repairing Commercial Aircraft Parts, IR35 & Use of Private Sector Contractors in MRO and Redefining General Industry Coverages.

Buying, Selling & Repairing Commercial Aircraft Parts

Most at-risk shippers of aircraft parts are not adequately covered. “Insurance is boring”, we get it! Traditionally, it’s also “administratively onerous to buy” too AND most “insurers don’t understand our business” – we know. So, the net result is insurance is often overlooked, or rather, misunderstood.

It’s easy to understand why. Typically, the seller is not too concerned. The parts they sell are usually made available Ex-Works with the onus on the buyer to insure the goods for their onward journey.

The buyer on the AOG desk will often believe they are adequately covered by their freight forwarder policy or in some cases a broader transit coverage policy. This is all well and good until things go wrong. Such coverage is rarely ‘All-Risk’ insurance meaning the amount they reimburse you is limited, often to just the weight of the goods. Not great for that overhauled condition IDG you just bought! Not to mention the business continuity disruption caused in doing so.

Then there is the small issue of proving negligence. If you haven’t experienced this ‘fun’ with a large shipper yet consider yourself lucky. In order to get any of your money back you will first need to invest time, administration and resources to proving the forwarder negligent. Good Luck with that.

What if there was a simple, cost effective and digital way to pick and choose when to apply All-Risk cover to specific high value/critical shipments and to download your own insurance certificate? Well now there is.

Disrupting the Market

Together we have developed PARTSURE an international InsurTech Managing General Agent (MGA) focused on the aviation aftermarket.

“We quickly realized that the process to buy and sell policies must be automated. The traditional process is slow, manual and the price is unnecessarily high to cover the costs of human intervention.”

Johnny McCord – Partsure CEO & Founder.

PARTSURE offers a full-service, self-managed digital insurance solution. Our unique platform handles every step of the process; from on-boarding, risk assessment, underwriting, policy management, payments, digital claims handling, sales and support. We leverage our cutting-edge technology and cloud-based solution to give unique customer insight and excellent customer experience. The system uses real-time data analytics and AI to provide real-time rating that is realistic and low cost, consistent with our digital approach to transforming how insurance is purchased.

Furthermore, PARTSURE seamlessly integrates with online parts trading platforms, marketplaces and transportation management systems, complimenting your customer’s journey and never detracting from it. Your customer no longer needs to go outside of your ecommerce platform to obtain insurance. They no longer need to take the risk of not having insurance because the time or resources weren’t available to take the traditional route of acquiring such coverage. Insurance can now be added with one click of a button.

If you would like to explore how PARTSURE can integrate with your ecommerce store, or to try our self-managed Partner Portal for ad-hoc self-managed cover solutions then get in touch, we’d love to talk with you!

Next week we will look at IR35 & Use of Private Sector Contractors in MRO. How ready is your business for HMRC regulation changes from April 2020?