2. HOT AIR BALLOON INSURANCE The Schantz Agency PO Box 51591 Jacksonville Beach, FL 32240 904-246-1018 www.theschantzagency.com

3. HOT AIR BALLOON INSURANCE RATING FACTORS Annual Hours Commercial Hours Number in Flight Limits Values Basket Capacity Credits/Debits

4. HOTAIR BALLOON INSURANCE UNDERWRITING FACTORS Hours in type, experience for All Pilots Use & Location Prior claims/incidents Age of system Annual certification Payment History DUI’s, etc.

5. COVERAGE ISSUES One in Flight When & Where does Aviation Liability/Passenger Liability begin and end? When & Where does hull begin and end? Timely reporting of claims Occurrence Coverage Vs. Claims Made Separate Limits?

6. HOT AIR BALLOON INSURANCE COVERAGE ISSUES Who is a Named Insured? Territory/Foreign Coverage Negligence Contractual Liability Excluded Hold Harmless

7. HOT AIR BALLOON INSURANCE LIABILITY Liability covers A) Aviation Liability and B) Passenger Liability. Some policies have a maximum occurrence limit usually $1,000,000 and passenger liability is a sub limit within. Schantz Policy has two limits of liability— one for each A & B. Legal Expenses. Unlimited, Separate from Liability

8. HOT AIR BALLOON INSURANCE MEDICAL PAYMENTS Provides first aid coverage for immediate use at time of an accident No fault approach Limit is usually $5,000 per person Separate from the liability limit

9. HOT AIR BALLOON INSURANCE HULL COVERAGE Provides “all risk” coverage subject to certain exclusions. Separate limits for envelope, basket and accessories. Deductibles of $500 and up, usually $1000. Settlement is based on “Stated Valued Coverage” or “Actual Cash Value” ( Check Policy)

10. HOT AIR BALLOON INSURANCE OTHER COVERAGES Additional Insureds Adds other parties to your policy to protect them from loss due to your negligence. Limits remain the same. Does not broaden policy. Does not cover AI’s negligence.

11. HOT AIR BALLOON INSURANCE COMMON EXCLUSIONS War, Terrorism Wear & Tear, Mechanical Defect, Mold Warranty Violations: Pilot, # of Pax by AX Size, Currency/Airworthy Workers Comp ***Liability assumed under contract***

12. HOTAIR BALLOON INSURANCE YOUR MAJOR COVERAGES Aviation Liability Passenger Liability Defense Costs Medical Payments Hull Coverage

13. HOT AIR BALLOON INSURANCE ACCIDENT DATA 1990 – 2009 342 NTSB Reported Accidents 30 Fatal Accidents, 46 Deaths Fatal Accidents Causes: Power Line 53.3% (16) Hard Landing 10.0% (3) Fuel Line 6.7% (2) Crew Error 6.7% (2) Equipment 6.7% (2)

14. HOT AIR BALLOON INSURANCE Fatals by State New Mexico 9 Colorado 6 California 5 Arizona 4 Ohio 4 MO, TX, OK, LA, IA----2 each NH, FL, OR, NV, WV, GA, KY, PA---1 each.

15. HOT AIR BALLOON INSURANCE NTSB REPORT SUMMARY LAST FIVE YEARS 20052006200720082009 # of Reports 15814 12 Fatal20230 Serious Injury 135111912

16. HOT AIR BALLOON INSURANCE # of ClaimsBy # of Pax$$$$% 147-10$3.2 Million68% 370-6$1.5 Million32% By % Comm. 1151%+$3.1 Million65% 400-50%$1.6 Million35% 1750% only$1.1 Million25% Based on Claims Submitted 2005-2009 Top Ten: PA, NM, CA, NH, AZ, MA, CO, IL, MI, MO

17. HOT AIR BALLOON INSURANCE Claims other than Bodily Injury Fan Damage Power Company Reimbursement Hit Farmer’s Sprinkler Hit Car Water Damage to Pax Camera Stolen Instruments Spooked Horse/Cow House Fire Burned HAB Helicopter Recovery of HAB Arson to Trailer, Burned HAB Damage to TV Camera. Grass Fire, Crop Damage Theft of Uprights

18. HOT AIR BALLOON INSURANCE CLAIM ISSUES Timely Reporting Communication With Passengers Waivers Question of Liability

19. HOT AIR BALLOON INSURANCE NON OWNED BALLOONS A unique coverage for festival organizers, balloonmeisters and sponsors Covers their negligence as regards non owned balloons

20. HOT AIR BALLOON INSURANCE THANK YOU!