Underwriting policies for emergency medical and police helicopter operators poses a different set of challenges compared with providing cover for fixed-wing air ambulance companies. While insuring fixed-wing aircraft – even those in the specialist area of medical evacuation and repatriation – has become a relatively straightforward process, writing policies for rotorcraft is trickier. Operating and maintaining helicopters is more complex and costly, requiring specialist skills. The aircraft themselves are expensive pieces of equipment that are overall more accident prone than fixed-wing aircraft. Recovering and repairing a helicopter that is involved in a crash is likely to be very expensive or impossible, so rotorcraft are more likely than fixed-wing aircraft to be written off as a complete loss, with consequent costs to the underwriter.

A dangerous operation

Around 70 per cent of medevac patient transports are transfers between hospitals, according to the (US) Association of Air Medical Services, and HEMS and police helicopters on average fly on much shorter missions than fixed-wing air ambulances. But some of missions involve flying in higher-risk conditions than fixed-wing aircraft, which (even when operating in conflict zones) typically operate between fully operational civil airports. Helicopters, however, must contend with unforgiving scenarios ranging from bad weather and limited visibility conditions to sea and high-altitude mountain rescue, wildfires, volcanic eruptions, civil unrest and the aftermath of extreme weather events. While many HEMS missions normally launch from a serviced take-off and landing site at a hospital, police base or airport, at the sharp end of the mission, crews will often be approaching and extracting from an unfamiliar location where reliable information on obstacles and other flight factors is not immediately available. En route to the pick-up site, rotorcraft fly at low altitude, so must avoid natural and man-made obstacles. Police helicopter crews frequently also operate at night and in densely populated urban environments, which further increase the risk of collateral damage on the ground if the worst happens.

Repair is expensive

Furthermore, when a helicopter goes down, repair is always expensive – and frequently not feasible. The aircraft often has to be written off completely. Even when repair is possible, many manufacturers specify that damaged airframes and other components are not field-repairable, but must be replaced if there is any sign of damage. On the other hand, if the operator is deemed to have set the aircraft's insured value too high, the insurer may insist on repair – potentially a time consuming, revenue-losing process.

Typically, any helicopter operator requires hull insurance against physical damage and liability. Policies for air ambulance helicopters normally exclude engine failure if caused by ‘wear and tear’, so cover should include collateral damage caused by the failure of an engine component. An adequate policy must also cover the cost of returning a damaged rotorcraft to its base or to a repair facility.

when a helicopter goes down, repair is always expensive – and frequently not feasible

Hull insurance policies are generally arranged on an agreed-value basis, where the value of the aircraft is settled in advance, and operators should beware of trying to trim costs by insuring their fleet for less than its true worth – or, conversely, of over-insuring. If the operator has insured the aircraft for a less-than-realistic value, the insurer may opt to write the aircraft off in the event of an accident instead of paying out for expensive repairs. On the other hand, if the operator sets the replacement cost above the aircraft’s true value, the insurer may choose to repair it – even if the client wants to write it off. So, agreeing a realistic value is key, insurers say.

Until the National Police Air Service (NPAS) was created in 2012, regional police helicopters in the UK largely relied on a High Court bond to settle claims in the event of an accident, rather than on an insurance policy, according to Bryn Elliott, Editor and Publisher of Police Aviation News. Following the creation of NPAS, there is now a fleet of 15 EC135 and EC145 helicopters operating on behalf of regional police services across England and Wales. Insurance of this fleet of has been handled by a single insurer.

Around 70 per cent of medevac patient transports are transfers between hospitals, according to the (US) Association of Air Medical Services

In the US, meanwhile, rotorcraft medical flights now far outnumber fixed-wing operations, with around 100,000 fixed-wing air ambulance flights completed annually compared to around 400,000 helicopter medevac missions. In 2005, a rapid increase in the number of HEMS operators and a surge in accidents prompted the US Federal Aviation Administration (FAA) to launch an inquiry into the fast-growing rotorcraft air ambulance sector following over 100 crashes and more than 90 fatalities in the US in the previous decade. In 2008 – claimed by some to be the worst ever year for HEMS crashes in US aviation history – 29 crew and patients died in 12 incidents involving HEMS rotorcraft, prompting the National Transportation Safety Board to lean on the industry to get its act together. Between 2011 and 2013, seven accidents involving air ambulance helicopters in the US resulted in 19 fatalities. In 2014, the FAA ordered helicopter operators, including air ambulances, to have stricter flight rules and procedures, improved communications and training, and additional onboard safety equipment.

Cover is costly

Unsurprisingly, then, cover is generally much more expensive for air medical helicopters than it is for fixed-wing aircraft insured for equivalent value, even for professionally piloted corporate helicopters, which are generally perceived as presenting the lowest risk. Appetite diminishes still further, and premiums increase, for specialist areas such as HEMS. Some sources state that premiums for HEMS rotorcraft may be three or four times higher than cover for an equivalent-value general aviation helicopter.

Yet, in reality, HEMS and police aviation are among the safer rotorcraft sectors, and have been getting steadily safer – at least in the US, the world’s biggest market for EMS and police rotorcraft aviation.

According to data gathered by the US Helicopter Safety Team (USHST) – a group of US government and industry leaders that was formed to address the factors behind an unacceptably high civil helicopter accident rate – the number of accidents involving civil helicopters in the US has declined significantly in recent years, and HEMS and police helicopter aviation outperform most other sectors in terms of their safety record. The USHST aimed to reduce fatal civil helicopter accidents in the US to 0.61 fatal accidents per 100,000 flight hours in 2019 – a target even more ambitious than the goal of 0.69 accidents per 100,000 hours set for 2017.

'HEMS ranks lowest for accidents'

If the operator has insured the aircraft for a less-than-realistic value, the insurer may opt to write the aircraft off in the event of an accident instead of paying out for expensive repairs

“The HEMS area is ranked best on the low accidents list and in the top half on the low fatal accidents list,” said USHST spokesperson Tony Molinaro. “Air ambulance helicopters fly about 16 per cent of all the [US civil helicopter] industry’s hours, so it would be expected that they would also experience about 16 per cent of accidents. However, this is not the case.”

Only seven per cent of helicopter accidents involve an air ambulance mission, according to the USHST. Aerial observation, police and news helicopter operations account for 18 per cent of flight hours and 11 per cent of total accidents.

Air ambulance and police operations were also rated better than expected in terms of fatal accidents.     

“Although helicopter air ambulance operations have somewhat higher amounts of fatal accidents, the numbers are lower than would be expected when compared to the share of flight hours. Air ambulance stays in the top tier, but does fall from first to the sixth position. This may be because their missions are sometimes carried out in poor weather or in challenging landing areas where the risk of a serious accident is higher,” Molinaro said.

In contrast, personal and private helicopter flights, which account for only three per cent of total flight hours, accounted for 25 per cent of fatal accidents over the same period, according to the USHST.

Any accident involving a police or medevac flight is guaranteed extensive media coverage. Despite their comparatively good safety record, HEMS and police helicopter operators in the US and elsewhere may be seen as legitimate targets for litigation when things go wrong, underlining the need for sufficient liability cover. Robb & Robb, a Kansas City-based law firm that specialises in such cases, currently holds the US record for the highest single pre-trial settlement, for US$100 million, for a client who sustained burn injuries in the crash of a medical helicopter (Repsher v. Air Methods Corporation, 2008). Payment was split between Air Methods (the largest operator in the US HEMS market) and Airbus, manufacturer of the helicopter.

More recently, in 2017, 10 survivors of a fatal accident involving a Glasgow police helicopter won £1.3 million in damages from helicopter operator Babcock. Ten people died in 2013 when the EC135 helicopter operated by Bond Aviation (taken over by Babcock in 2014) crashed on a city center bar.    

Demand keeps rising

Demand for insurance for HEMS operators worldwide is set to increase substantially. The air ambulance services market in the US is predicted to grow by around nine per cent over the next seven years. Growth is even more rapid in Asia: China’s HEMS fleet has grown by as much as 60 per cent in recent years and continues to expand.

“In the Chinese insurance market, there are lots of companies offering liability insurance and hull/equipment insurance and helicopter owners can buy the insurance for a reasonable price. The premium is not related to the demands of the helicopter, but the helicopter accident rate,” said Jennifer Wang of Beijing Red Cross 999 Emergency Medical Centre, which operates HEMS and fixed-wing air ambulance services in China.

HEMS will always be a relatively high-risk sector. It is also a vital service, saving many lives each year. Accidents involving EMS and police rotorcraft will often attract negative publicity. However, insurers’ appetite for risk appears to be matching demand, and operators too seem increasingly aware of their own insurance needs.