The Rising Costs of Aircraft Insurance

Recent Crashes Put Focus on HEMS Industry wide and Attribute to the Rising Costs of Insurance

It's not news to any of us that Helicopter-Emergency Medical Services (HEMS) crashes are at the forefront of everyone's attention these days; the topic is in the newspapers, on the internet and being deliberated at the NTSB's EMS public hearing as I write this article. We are aware that HEMS has been put on the NTSB's most wanted list and we all know that changes need to be made within this invaluable service that is provided to the people of our Nation and Nations worldwide, by people that really are, in my opinion nothing short of heroes. But heroes are "people" faced with extenuating circumstances and are plagued with human emotion, and thank goodness for that because it's what saves many of us; however, sometimes errors in judgment for myriad of reasons are made resulting in accidents that could have prevented. We can't prevent all accidents, it's the nature of the beast that we have to accept, unfortunately there will be some accidents that just happen, but there ARE some that sadly could have been prevented and hopefully in the future, will be prevented.

It has been researched and found that many of the fifty-five (55) EMS related aviation accidents (fatal and non fatal) that occurred between January 2002 and January 2005 could have been prevented with simple corrective actions.

Although the NTSB issued recommendations in 2006 to the FAA, to improve EMS helicopter operations safety, nine (9) fatal HEMS accidents occurred between December 2007 and October 2008. It is this statistic, from the last 12 months that has finally prompted the NTBS to conduct a public hearing, where a full agenda of subject matter experts are now providing testimony in these specific issue areas. By the time we all arrive at HAI, maybe we will have heard the outcome of this hearing. Hopefully it will have found a reasonable and cost effective way to act on the four (4) safety recommendations by the NTSB that the FAA is now pursuing which are:

1. Implementation of a flight risk evaluation program for EMS Operators

2. Establishment of formalized dispatch and flight-following procedures including up to date weather regulations.

3. Installation of terrain awareness and warning systems on helicopters/and night vision goggles (NVG's).

4. Conduct of all flights with medical personnel on board in accordance with stricter commuter aircraft regulations.

The NTSB has noted some recurring themes in HEMS crashes, including Controlled flight into terrain (CFIT), inconsistent dispatch procedures and limited requirements to use "safety-enhancement technologies" like night vision goggles, according to CNN. The NTSB can make safety recommendations for the medical flight industry but only the FAA can make them mandatory. And if these recommendations become mandatory rules, how are the HEMS operators going to pay for the upgrades, the training? And who is going to conduct the training of HEMS Pilots on the use of NVG's?

Questions and concerns from pilots are as follows:
• NVG's are expensive to install and you can train until you are blue in the face but it's the experience of using them. The air ambulances in the UK are limited to daylight operations only. Anything needed at night is down to the Royal Air Force, Royal Navy and the Coast Guard.
• Who will conduct the intensive night training required for utilizing the goggles? Who will write/approve and certify successful completion of the training? What about the aircraft lighting systems that will have to be completely replaced as the NVG's amplify ambivalent light thousands of times.
• What about single pilot missions? Who is going to wear the set of eyeballs that will clear the aircraft from ground/wire hazards?
• Isn't there a wait for night vision goggles for 12-18 months due to the war and soldiers having first priority? If so, why isn't production and supply being ramped up to accommodate demand?

Well, if we have the demand and production is ramped up then the question is still there – who is going to conduct the training and how are the EMS operators going to pay for this? Is it time to look to the military for help? Do lawmakers have provisions within their economic stimulus plan to help the EMS operators that are providing such a demanding and invaluable service to the people of our nation?

Hopefully the HEMS public hearing being conducted will help come to some sort of affordable conclusion. Following are a few statistics from the NTSB's data regarding two recent accidents:
• On December 3rd, 2007, a helicopter went down in the ocean near Whittier, Alaska, after the pilot flew into stormy conditions at night in violation of federal rules. The rules required that pilots maintain sight of lights on the ground while flying at night. In addition, the pilot was using night-vision goggles but had not received the required training on them. The company was supposed to study the risks of each flight before it took off, but the risk reviews could not be found after the crash. The crash killed four people. Okay – now ask yourself the same questions I'm asking myself – and you know what those questions are!
• On June 8th, a helicopter crashed in a national forest near Huntsville, Texas. Another pilot had turned back because of fog after trying to pick up the same patient. The pilot of the helicopter that crashed accepted the flight and crashed in the same spot where there the first pilot had found the fog.

As a professional in the Aviation Insurance industry and as a fellow pilot the facts are apparent. Investigation documents released by the NTSB last week reveal a complex mosaic of multi-level human and technology failures behind nine of these crashes in the last two years.

Page upon page of interviews, transcripts and forms unveil distressing and disturbing causes, including "helicopter shopping" by dispatchers, when one HEMS company rejected a flight, generally due to weather, they kept dialing until another operator accepted the flight. Other factors include pilots assigned, or voluntarily taking excessive duty time, pilots flying into marginal weather or below safe performance envelopes; a pilot flying injured; and in at least one case a pilot with a vision restriction apparently flying without wearing his glasses. What? Come on guys/girls……

Organizational problems also loom large as at least contributory factors: morale problems, high personal turnover, maintenance issues, old equipment, failure inability to install modern safety enhancements such as TCAS, TAWS and NVG's. And instrument rated pilots flying IFR-equipped helicopters, but not being allowed to fly IFR under the terms of the operator's Part 135 certificate.

One thing is for certain, as many of these accidents work their way through the NTSB Investigative process and claimants make their suits in Federal courts concurrently, the Insurance Companies will have to provide defense costs and liability payment for those injured or killed in these accidents.

As these claims are paid, the insurance companies will raise rates. Obviously. Everyone knows this. Helicopter EMS operators should plan accordingly for the 2009 season as they will see insurance rates increasing at a higher rate than that of their fixed wing counter parts.

To cite the FAA's Notice N8000.301 dated 8/1/2006: "HEMS operate in a demanding environment. They provide a service to the nation by providing crucial, safe, and efficient transportation of the critically ill and injured patients to tertiary medical care facilities. While the contribution of HEMS is profound as a component of our Nation's medical infrastructure, from an operational standpoint, it is a commercial aviation activity performed by air carrier operators. It; therefore, must be conducted with the highest level of safety. To meet this requirement, risks must be identified, assessed, and managed to ensure that they are mitigated, deferred or accepted according to the operator's ability to do so within the regulations and standards appropriate to the operation".

So that's all fine – and it certainly makes sense, obviously HEMS operators are going to need to address all areas of their operation from morale to maintenance and the cost of adding modern safety equipment. This is certainly a catch 22, as it goes right back to the cost of updating an aging fleet of helicopters with modern safety equipment and not only the cost of the training of the pilots, but who is going to do it?

Until the answers to those questions are found – here's what we can do in the meantime. As pilots – we can remember the first thing we were ever taught and that is:

Federal Aviation Regulation 91.3: Responsibility and authority of the pilot in command.

a. The pilot in command of an aircraft is directly responsible for, and is the final authority as to, the operation of the aircraft.

And as owners/operators we can make sure we have implemented and are following the basic concepts of risk management, I am highlighting what I find to be the most important. These are per the FAA's Operational Risk Assessment Program for HEMS Notice N8000.301 and can be read in full at: http://rgl.faa.gov/Regulatory_and_Guidance_Library
• The overriding concept is that the pilot's authority to decline a flight assignment is supreme, while his/her decision to accept a flight assignment is subject to review, if certain risks are define.
1. The pilot's decision to decline, cancel, divert or terminate a flight overrides any decision of other parties to accept or continue a flight.
2. The pilot's decision to accept a flight assignment may be overridden by other personnel by use of the operational control procedures and policies of the certificate holder including the use of risk assessment and management tools and techniques.
• If the pilot has declined a flight NO other parties (e.g., management, operations, etc.) shall continue to conduct risk assessments pertaining to that flight as their input could not be used to override the pilot's decision to decline the assignment…… cont.

It's apparent that there are many factors to be considered when a helicopter is called out for an Emergency flight, so many things to account for in order to make a go/no go decision. It is mind boggling really; add to that the human factor of emotion that plays into it. Pilots are a rare breed – they really are, an HEMS pilots, truly, in my own eyes are heroes. But they need the proper training and the best equipment, someone has to give that to them. In turn, pilots, if you need glasses, then don't conduct the flight without them……your mother taught you better than that.

As you can see, there is no easy answer; it's going to take everyone working together knowledgeably, logically and with the right goal in mind. For now, Insurance rates are high and will no doubt continue to increase. Why you can't stand around and complain about it – we all have to work together to move things in the right direction. You can do that by maintaining or opening up the lines of communication with your insurance agent, do what it necessary to make your operation safer, train your pilots, improve maintenance, have a definite dispatch procedure and be prepared to open it all up to your agent and underwriter. In order to help keep your costs down, be prepared to work closely with your agent and make sure you have one that is well versed in vertical risk placement , one that has an understanding of the needs and problems within this industry and one that has a good relationship with the underwriting companies.

Additional sources of information:

EMS Safety Bill in Congress – HR3939: http://thomas.loc.gov

Aviation Investment and modernization act of 2007 – S.1300:

www.govtrack.us/congress/bill.xpe?bill=s100-1300

These articles are purely advisory in nature. Your own certificated flight instructor, the FARs, pilot's operating handbook and various updated transmittals from the FAA or your aircraft manufacturer may alter or affect the information published. Leading Edge Aviation Insurance neither assumes any responsibility for the accuracy of these articles, nor any liability arising out of reliance upon these articles.