What impact has the General Aviation Revitalization Act (GARA) had on product liability insurance costs?

The General Aviation Revitalization Act (GARA) significantly influenced product liability insurance costs primarily by providing manufacturers of general aviation aircraft with protection against lawsuits for products that have been in service for more than 18 years. This limited liability effectively means that after this time period, manufacturers can no longer be held liable for design defects or failures, which theoretically reduces the risk they face.

However, it is essential to recognize that while GARA's protections have been beneficial to manufacturers, they can also lead to a perception of increased risk for insurers as they navigate the legal landscape of product liability. With certain long-standing manufacturers or models no longer facing liability after the 18-year threshold, insurers may adjust their pricing to reflect the risks associated with older aircraft that could potentially have unresolved defects or issues. This perceived increase in risk can drive up costs for obtaining product liability insurance for manufacturers who might still need to insulate themselves from future claims.

Therefore, although GARA was designed to bolster the aviation industry and encourage manufacturers to produce new aircraft, its indirect impact on perceived risk and insurer behavior can lead to increased costs for product liability insurance in the general aviation sector. This understanding highlights the complicated relationship between aviation law, regulations, and insurance dynamics.