In October 2001, a helicopter being used to herd cattle crashed. The aircraft was owned by Holt Helicopters and it was insured under an aviation policy issued by National Union Fire Ins. Co. through AIG Aviation (AIG). The insurer denied coverage and both Holt and AIG filed motions in a suit where a jury found in favor of Holt and AIG appealed.

During the appeal, AIG reasserted its argument that a material policy provision was breached. Its policy contained a Pilot Warranty that excluded coverage when a given pilot did not have the level of experience indicated in the warranty. During the crash, the pilot operating the helicopter was short of the required hours. AIG denied the claim on that basis. The jury during the trial agreed with Holt’s arguing two issues. One, there was no causal connection between the pilot’s experience level and the crash and two, AIG did not sufficiently investigate the loss.

The higher court evaluated the arguments, focusing on causality and the claims investigation. In its opinion, the causality issue (as a matter of public policy) was important and merited consideration by the trial court jury. It also found that the loss investigation did not rise to an appropriate level to meet the obligation an insurer owes under a policy. The trial court jury’s ruling in favor of Holt was upheld.

AIG Aviation, Inc. Appellant v. Holt Helicopters Inc., Appellee. TXCTApp, San Antonio. No. 04-05-00291-CV. Filed April 26, 20006. Affirmed. Westlaw 198 S.W. 3d 276