Airpark insurance… is it required?

We recently received a question involving airpark homeowners association (HOA) insurance. The founder of the airpark no longer has an ownership interest and the lot owners were in the process of establishing an HOA. Specifically, the lot owner was hoping the HOA could bypass buying insurance, citing among other sources a Recreational Use Statute (see below), to save the quoted $1,500 annual premium. Further, he stated, “I’ve been told that insurance for an airpark is not required. Is this correct?”

I reached out to Regal Aviation Insurance (800-275-7345) for some feedback. Regal’s Jason Wissmiller offers, “I don’t know enough about the Recreational Use Statutes to comment on that issue specifically, so my first recommendation would be to consult an aviation attorney. I don’t believe those statutes prevent 3rd parties using your airpark from coming after the HOA for bodily injury or property that resulted from the use of the airpark. For the relatively small cost of the liability policy, I would definitely recommend that the HOA carry a policy to cover the ownership, maintenance, or use of the airpark. The liability policy will provide a limit of liability and will also provide a defense for the liability. The cost to defend, basically the cost of the attorney, is paid outside of the limit of liability. The HOA needs to look at the cost of the policy as essentially putting an aviation attorney on retainer for coverage provided under the policy.”

The Recreational Use Statute cited follows:

58-3202. Limiting liability of property owners to persons entering premises for recreational purposes; definitions. As used in this act:

(a) “Land” means land, roads, water, watercourses, private ways and buildings, structures, and machinery or equipment when attached to the realty and includes agricultural and nonagricultural land.

(b) “Owner” means the possessor of a fee interest, a tenant, lessee, occupant or person in control of the premises.

(c) “Recreational purpose” includes, but is not limited to, any of the following, or any combination thereof: Hunting, fishing, swimming, boating, camping, picnicking, hiking, pleasure driving, nature study, water skiing, winter sports, noncommercial aviation activities and viewing or enjoying historical, archaeological, scenic, or scientific sites.

(d) “Charge” means the admission price or fee asked in return for invitation or permission to enter or go upon the land.

(e) “Agricultural land” means land suitable for use in farming and includes roads, water, watercourses and private ways located upon or within the boundaries of such agricultural land and buildings, structures and machinery or equipment when attached to such agricultural land.

(f) “Farming” means the cultivation of land for the production of agricultural crops, the raising of poultry, the production of eggs, the production of milk, the production of fruit or other horticultural crops, grazing or the production of livestock.

(g) “Nonagricultural land” means all land other than agricultural land.