What Hangarkeeper's Insurance Actually Covers

Hangarkeeper's insurance covers the operator's negligence, not acts of God, and the gap between what owners think it covers and what it actually covers has cost airports millions.

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There is a belief floating around a lot of hangars that goes something like this: my plane is parked in the FBO's hangar, so if something happens to it, the FBO's insurance has me covered. It is a comfortable assumption. It is also, in most of the cases that actually matter, wrong. And the day an aircraft owner learns it is wrong tends to be the worst possible day to find out.

Hangarkeeper's insurance is one of the most misunderstood coverages in general aviation, by tenants and by more than a few operators. This is what it actually does, where its edges are, and why the gap between what people think it covers and what it really covers has cost airports real money.

One note before we start: this is general education, not insurance or legal advice. Coverage terms vary by policy and carrier, so your broker and your attorney are the ones to confirm how any of this applies to you.

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What Hangarkeeper's Insurance Is For

Hangarkeeper's liability coverage protects the operator, the FBO, airport, or hangar owner, against legal liability for damage to aircraft that are in their care, custody, and control.

Care, custody, and control is the key phrase. When you take responsibility for someone else's aircraft, storing it, moving it, working around it, you take on the risk that your operation damages it. A line tech dings a wingtip while repositioning it. A door comes down on a tail. A tug operator misjudges a turn. Hangarkeeper's coverage responds to that category of loss, where the operator's negligence causes damage to an aircraft that belongs to someone else. Minimums in real leases often start around $250,000 per aircraft, though the number varies widely by operation.

So it is real and it is important. If you store or handle tenant aircraft, you want it. But look closely at that description, because the more useful question is what it leaves out.

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What It Does Not Cover, and Why That Matters

Hangarkeeper's insurance covers the operator's negligence. It is not a blanket policy on every aircraft in the building, and the two biggest gaps are the ones that cause the most damage.

The first gap is acts of God. Weather is the clearest example. If a tornado or a hurricane destroys a hangar and the aircraft inside it, that is not the operator's negligence, and hangarkeeper's coverage generally does not respond to it. This is not a technicality. It is the entire point of the coverage. It insures against what the operator does, not against what the sky does.

The second gap is that it does not replace the aircraft owner's own hull insurance. Hull coverage is what pays to repair or replace an aircraft for a wide range of damage regardless of fault. Hangarkeeper's coverage is narrow and fault-based. An owner relying on the FBO's hangarkeeper's policy instead of carrying their own hull coverage has a thin safety net with a large hole in the middle of it.

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The Gap in a Real Event

The clearest illustration is what happened at John C. Tune Airport in Nashville. On March 3, 2020, a tornado tore through the field and destroyed more than 90 aircraft along with 17 hangars. The airport's insurer paid out less than $5.5 million in property damage and less than $700,000 in business interruption, far short of what it took to recover, and in early 2022 the airport authority sued seeking at least $10 million more to close the gap.

Many of the aircraft owners had assumed the FBO's insurance would cover their losses. It did not, because the loss was weather, not operator negligence, which is exactly the gap described above. Owners who had not carried their own hull coverage were simply out of pocket. The paperwork that would have protected them, their own current insurance, either did not exist or was never verified.

That is the lesson in one story. Hangarkeeper's coverage did its job, which is a narrower job than most people think, and the space it does not cover swallowed dozens of aircraft owners at once.

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What Operators Should Take From This

If you run a hangar operation, two things follow, and neither is complicated.

First, carry appropriate hangarkeeper's coverage for your own exposure, sized to the aircraft you actually handle. That protects you from the liability that is genuinely yours.

Second, and this is the one that gets neglected, require and verify that your tenants carry their own coverage. Your hangarkeeper's policy protects you from your negligence. It does nothing for the tenant whose aircraft is lost to weather, and it does nothing for you when that tenant, uninsured and angry, comes looking for someone to blame. The protection that closes the gap is each tenant's own current insurance, named correctly and confirmed to be in force, with your airport listed as additional insured where your leases require it.

The good news is that closing this gap is cheap. The GAO has estimated that 80 to 90 percent of general aviation owners already carry some liability coverage, and for a light single, liability runs a few hundred dollars a year. The problem was never the cost of coverage. It is whether anyone confirmed the coverage exists and stays current, which is an administrative task, not a financial one.

That is the piece we focus on in the Hangar Direct platform: tenants upload their own certificates, the system reads and tracks the coverage and expiration dates, and compliance stays visible instead of drifting quietly out of date in an email thread. But the tool is beside the point here. The point is knowing where hangarkeeper's coverage stops, and making sure something, ideally each tenant's own verified policy, picks up where it leaves off.