Under a typical management agreement, the owner carries hull and aviation liability on the aircraft — usually $200M-$300M combined single limit for a midsize or heavy — and adds the management company as a named insured. The management company carries its own commercial general liability, hangar-keeper, and (if operating Part 135) non-owned aircraft liability and operator-level coverage. Charter flights trigger the operator's policy as primary.
Who actually owns the insurance policy on a managed aircraft?
The owner owns the policy. In nearly every management arrangement, the aircraft owner is the named insured on the hull and liability policy, pays the premium directly (or through the management company's operating account as a pass-through), and chooses the broker. The management company is added as an additional named insured so it has direct rights under the policy when its crews are flying the aircraft, but the policy follows the tail and the owner.
This matters at renewal and at claim time. The owner controls limits, deductibles, and carrier selection. The management company will have strong opinions — and contractual minimums it requires you to carry — but the checkbook and the policy number belong to the owner.
What hull and liability limits does the management company require?
Standard contractual minimums are $1M smooth hull (agreed value matching the aircraft's insured value) and $200M-$300M combined single limit liability for a midsize, $300M-$400M for a super-midsize or heavy, and $400M-$500M for ultra-long-range tails like a Global 7500 or G700. Light jets and turboprops typically sit at $100M-$200M.
These numbers have moved. Five years ago, $100M was a defensible limit on a midsize. Underwriters have pushed retentions and limits up across the board, and most major management companies will not accept a tail onto their certificate without at least $200M CSL on anything jet-powered. Expect annual hull-and-liability premium of roughly 0.5%-1.2% of hull value plus a liability load that scales with limits — a $25M midsize carrying $250M CSL typically runs $90K-$160K annually in the current market.
What does the management company carry on its own balance sheet?
The management company carries commercial general liability, hangar-keeper's legal liability, non-owned aircraft liability, premises liability at any facility it operates, workers' comp on its employees including the pilots assigned to your aircraft, and — if it holds a Part 135 certificate — operator-level aviation liability that responds when the aircraft is flown for hire.
Hangar-keeper coverage is the one owners forget to ask about. If your $40M Falcon is parked inside a management company's hangar and the sprinkler system discharges, or another tenant's aircraft rolls into yours, the hangar-keeper's policy responds before your hull policy does. Confirm the limit. Reputable operators carry $100M-$500M hangar-keeper depending on what's typically parked under their roof.
How does Part 135 charter change the insurance stack?
When the aircraft flies a charter leg under the management company's Part 135 certificate, the operator's policy becomes primary and the owner's policy sits excess or non-contributing for that flight. The management company is the operator of record in the eyes of the FAA and the insurance market, so its certificate-level coverage responds first to a third-party claim arising from a revenue flight.
The owner's hull policy still covers the airframe — hull doesn't care whether the flight was Part 91 or Part 135 — but the liability tower is rearranged. This is why your management agreement will specify minimum operator-side limits the management company maintains, typically matching or exceeding the owner's CSL. Ask to see the certificate of insurance for the operator's policy, not just the aircraft policy. They are two different documents.
What is "named insured" versus "additional insured" and why does it matter?
Named insured status gives a party direct contractual rights under the policy, including the ability to file claims and receive settlement proceeds. Additional insured is a narrower grant — typically defense and indemnity for vicarious liability only. Management companies insist on named insured status, and they're right to.
If the management company is only an additional insured and a claim arises from crew negligence, the carrier can pursue subrogation against the management company even while defending it. As a named insured, the management company is inside the policy and the carrier cannot subrogate against its own insured. Owners occasionally push back on this during agreement negotiation; the push-back is misplaced. Named insured status for the management company is industry standard and protects the operational relationship.
What about waiver of subrogation and breach of warranty?
The owner's policy should include a waiver of subrogation in favor of the management company and any sublessees, plus a breach of warranty endorsement protecting any lender or lessor. Standard aviation policies issued by AIG, Global Aerospace, USAIG, Starr, and Old Republic accommodate both without additional premium in most cases.
Breach of warranty matters when there's an aircraft loan. If the owner violates a policy condition — flies outside approved geography, uses an unapproved pilot, lets the annual lapse — the carrier could deny the hull claim. The breach of warranty endorsement carves out the lender so the bank still gets paid up to the loan balance regardless of the owner's policy violation. Your lender will require it. Confirm it's on the policy before closing.
Who pays for insurance under the management agreement?
The owner pays. Premium is an aircraft operating expense, passed through at cost with no markup on a properly drafted agreement. Management companies that mark up insurance premium are an outlier and should be challenged during negotiation. The pass-through should appear as a line item on the monthly operating statement with the carrier invoice attached.
What the management company legitimately charges for is the administrative work of obtaining quotes, managing renewal, and handling claims — and that work is bundled into the base monthly management fee of $10K-$25K, not billed separately. If your management company is invoicing "insurance administration" on top of pass-through premium, that's a fee to negotiate out at renewal.
What should an owner verify annually?
Pull the certificate of insurance every year and confirm five things: hull value matches current market (under-insurance creates partial-loss disputes), liability limits meet the management agreement minimums, the management company is listed as named insured, waiver of subrogation and breach of warranty endorsements are attached, and the operator's Part 135 certificate of insurance shows current coverage if your aircraft is on a charter certificate. Thirty minutes of document review at renewal prevents the worst surprises after a claim.
Frequently asked questions
Who actually owns the insurance policy on a managed aircraft?
The owner owns the policy. In nearly every management arrangement, the aircraft owner is the named insured on the hull and liability policy, pays the premium directly (or through the management company's operating account as a pass-through), and chooses the broker. The management company is added as an additional named insured so it has direct rights under the policy when its crews are flying the aircraft, but the policy follows the tail and the owner.
What hull and liability limits does the management company require?
Standard contractual minimums are $1M smooth hull (agreed value matching the aircraft's insured value) and $200M-$300M combined single limit liability for a midsize, $300M-$400M for a super-midsize or heavy, and $400M-$500M for ultra-long-range tails like a Global 7500 or G700. Light jets and turboprops typically sit at $100M-$200M.
What does the management company carry on its own balance sheet?
The management company carries commercial general liability, hangar-keeper's legal liability, non-owned aircraft liability, premises liability at any facility it operates, workers' comp on its employees including the pilots assigned to your aircraft, and — if it holds a Part 135 certificate — operator-level aviation liability that responds when the aircraft is flown for hire.
How does Part 135 charter change the insurance stack?
When the aircraft flies a charter leg under the management company's Part 135 certificate, the operator's policy becomes primary and the owner's policy sits excess or non-contributing for that flight. The management company is the operator of record in the eyes of the FAA and the insurance market, so its certificate-level coverage responds first to a third-party claim arising from a revenue flight.
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PilotPrivate Editorial is the in-house editorial team that produces every article on the site under the byline “Staff.” The team consolidates working knowledge from former charter brokers, fractional program members, aircraft management operators, and aviation tax advisors. Articles cite specific regulations (FAR Part 91, Part 135, IRC §168, §1031, §274, §469) and quote real pricing without affiliate filtering. More about PilotPrivate.
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