PASA Professional Air Sports Association by CHRIS SANTACROCE, Paragliding Liaison Two years ago, our insurance world
to comply with Vermont’s insurance
came crashing down. The United
company rules.
the Professional Air Sports Association
States Hang Gliding and Paragliding
Self-insurance requires us to col-
Association was faced with its most
lect the money from ourselves on an
(PASA) to certify hang gliding and
difficult moment when the Lloyds of
annual basis, sufficient to pay the costs
paragliding flight schools. PASA’s repu-
London underwriters that had provided
of running the self-insurance program,
tation in providing school/instructor
insurance coverage for USHPA and nine
to pay the legal defense cost of defend-
certification for kite boarders proved
flight schools drew a line in the sand.
ing claims, and to pay claimants for
key in getting a reinsurer for our self-
legitimate claims. Because claims
insurance program. The reinsurer
vary in frequency and amount, self-
made a condition of the reinsurance for
activity because we were not worth
insurance also requires us to have a
commercial schools that those schools
their taking the risk.
reserve fund that makes it possible for
be PASA certified.
They stated they would no longer cover our commercial or recreational
Imagine our shock! Thankfully, our community quickly responded to the
us to pay unusual claim expenses. The money we collect from ourselves has to
Two years later: Hang gliding and paragliding instruction has every
challenge by raising several million dol-
be enough to keep that reserve fund at
reason in the world to thrive. The whole
lars to set up the reserve fund needed
a level that ensures our self-insurance
community wins!
to self-insure.
will remain solvent. The Vermont
To self-insure, we had to set up an insurance company and get that company licensed. We set up that company,
66
Finding a reinsurer was problematic. The solution was found in enlisting
Some details, such as the ques-
regulators tell us what those minimum
tion of the association between PASA,
requirements must be.
Recreation RRG , and USHPA, along
As a backstop to ensuring solvency,
Recreation Risk Retention Group, in the
self-insurance also requires finding
with their respective responsibilities, are worth mentioning. USHPA still oversees all ultralight
state of Vermont, as a Risk Retention
an insurance company that would be
Group under the Federal Liability Risk
willing to take on the risk of really big
Retention Act. We chose Vermont
claims - this is called reinsurance. The
the US. For non-commercial tandem
because of its stellar reputation as a
way it works is that if there is a claim
pilots and instructors, it’s that simple
state that knows how to regulate small
over a certain level (the retained level),
and always has been. But commercial
risk retention groups like ours in ways
the reinsurer pays that excess part of
operators have to receive approval
hang glider and paraglider flying in
that ensure their long term viability.
the claim (the excess level). In our case,
from PASA to get insurance from our
Vermont has licensed Recreation RRG
we set up our self-insurance with a
self-insurance company.
as an insurance company, and we have
retained level of $250,000.
HANG GLIDING & PARAGLIDING MAGAZINE
The inside scoop is that a school