Hangar Keepers Insurance: Coverage for Stored Aircraft

What does hangar keepers insurance actually cover?

Hangar keepers insurance covers physical damage to aircraft that belong to someone else while those aircraft are in the insured's care, custody, or control. The policy responds when an FBO line tech tows a Citation into a hangar door, when a maintenance shop drops a jack through a wing, or when a fuel truck rolls into a parked King Air. It is the operator's coverage — not the aircraft owner's — and it pays for damage the operator is legally responsible for.

The standard form covers aircraft on the ground, being moved by ground equipment, or being worked on. It does not cover aircraft in flight, which is why MROs that perform maintenance test flights buy a separate non-owned aircraft liability endorsement or a products/completed operations extension. The policy is written on either a legal liability basis (operator must be at fault) or a direct primary basis (pays regardless of fault, with subrogation rights against the operator). Most aircraft owners storing high-value jets demand direct primary form, and they should.

Who needs to carry it?

Any business that takes possession of aircraft it does not own needs hangar keepers coverage. That includes FBOs, MROs, paint and interior shops, avionics installers, Part 145 repair stations, flight schools holding student-owned aircraft, charter operators managing owner aircraft, and aircraft brokers staging inventory. Even a Part 91 flight department that occasionally hangars a partner's aircraft has exposure.

Airport authorities frequently require hangar keepers limits as a condition of the lease — $5M to $25M is typical for a small FBO ground lease, with major-market FBOs at large business aviation airports often required to carry $50M to $100M. Owners trusting an MRO with a $40M Gulfstream will ask for a certificate of insurance showing limits at or above hull value before signing the work order.

What are realistic limits and premiums?

Limits run $1M on the small end to $100M-plus for major FBO chains, structured with a per-occurrence cap and a per-aircraft sublimit. A regional FBO handling piston and turboprop traffic typically carries $5M to $10M per occurrence with a $1M to $5M per-aircraft sublimit. An MRO working on midsize and super-mid jets needs $25M to $50M per occurrence with per-aircraft limits matching the highest-value airframe on the floor. A heavy-jet completion center or a multi-location FBO chain handling Global 7500s and G700s carries $100M to $250M, often layered across two or three carriers.

Premiums for a standalone single-location FBO with $10M per-occurrence limits typically range $15,000 to $50,000 annually. An MRO with $50M limits and meaningful jet exposure runs $40,000 to $150,000. Premium drivers are total values handled (the carrier asks for peak hangar exposure — every dollar of aircraft value under one roof at once), number of movements per month, tug and tow procedures, line tech training programs, and loss history. USAIG, Global Aerospace, Starr, Berkshire Hathaway Specialty, AIG, and AXA XL all write the class, with Old Republic Aerospace active in the FBO segment specifically.

How does it interact with the aircraft owner's hull policy?

The owner's hull policy is primary for most ground incidents, and the hangar keepers policy responds either as excess or as direct primary depending on how it is written. If the owner's hull insurer pays a claim caused by FBO negligence, that insurer subrogates against the FBO, and the FBO's hangar keepers carrier defends and indemnifies. This is why hangar keepers is sometimes called subrogation coverage in the FBO world.

Sophisticated owners negotiate waiver of subrogation clauses in storage and maintenance agreements, but those waivers must be backed by a hangar keepers policy that permits the waiver — many carriers require notice and endorsement. Owners storing aircraft worth more than $25M should also confirm the FBO's per-aircraft sublimit covers full hull value, not just the per-occurrence cap. A $50M per-occurrence policy with a $10M per-aircraft sublimit is inadequate for a $40M Falcon 8X parked under that roof.

What are the most common exclusions and gaps?

The four exclusions that generate the most disputes are in-flight damage, defective workmanship, mysterious disappearance, and weather perils on outdoor ramp storage. In-flight coverage requires a non-owned aircraft endorsement and is priced separately. Defective workmanship — the part the mechanic installed fails and damages the engine — is excluded under the base form and requires a products liability extension; this is the single biggest gap for MROs. Mysterious disappearance and theft of avionics or parts often have low sublimits ($25,000 to $100,000) that do not reflect the cost of replacing a modern FMS or a set of cabin monitors.

Weather exclusions matter for FBOs in hail, hurricane, and tornado corridors. A Texas FBO with outdoor tie-down operations needs affirmative wind and hail coverage; the default form often excludes or sublimits these perils. War risk, nuclear, and confiscation exclusions are standard and follow industry forms. Named pilot warranties do not apply to hangar keepers — that is a hull policy concept — but the operator's commercial general liability policy and any non-owned aircraft liability will have their own pilot warranties to manage.

What underwriting information drives the quote?

Underwriters want peak values, square footage, fire protection, tow procedures, line tech experience, and a five-year loss run. The peak value question is the most important: what is the maximum aggregate aircraft value under one roof at any moment. An FBO that occasionally hosts three Globals and a BBJ during an event needs limits sized to that peak, not the average day. Hangar fire suppression (foam systems versus dry sprinklers versus none) moves premium 20% to 40%. Documented tow procedures, wing-walker protocols, and a minimum line tech tenure requirement all reduce rate.

Loss runs matter more here than in most aviation lines because hangar keepers losses cluster — a single hangar fire or tug-into-aircraft event can run $10M to $50M and reshape an account's rate for a decade. Operators with clean five-year loss runs and documented procedures see renewal increases held to 5% to 15% in a hard market; operators with a single major loss often face 50% to 100% increases or non-renewal.