If an aircraft mechanic performs a pre-purchase inspection on an aircraft and he or she fails to notice the defective condition of one of the aircraft’s components, will the mechanic’s insurance protect him or her if the aircraft owner later asserts a claim against the mechanic? Well, it will likely depend upon whether the defective component results in an accident.
Usually, an aircraft mechanic’s coverage under a Commercial General Liability (“CGL”) policy with products/completed operations coverage will protect the mechanic if an occurrence (accident) arises and a claim is asserted against the mechanic for damages resulting from his or her failure to do something he or she should have done (e.g. noticing a defective component). However, in the absence of an occurrence (accident), the aircraft mechanic is likely not covered by his or her CGL policy.
This situation arises in the context of an aircraft pre-purchase inspection when the aircraft mechanic performs the pre-purchase inspection, and then at the next annual a different mechanic observes a defective component that requires repair/replacement. The aircraft owner then looks to the aircraft mechanic who performed the pre-purchase inspection for the cost of that repair/replacement arguing that it should have been discovered during the pre-purchase inspection. In this situation, an aircraft mechanic’s CGL policy will not provide him or her with coverage because the aircraft owner’s claim does not arise from an occurrence (accident).
The moral of the story is that an aircraft mechanic needs to be aware of this gap in coverage and he or she needs to perform a cost-benefit analysis for performing pre-purchase inspections. In the absence of insurance coverage, performing the pre-purchase inspection may not be worth it.