The Exclusion Sitting on Top of Your Hangar

A tug operator misjudges a turn. A wingtip meets a hangar door frame. The aircraft belongs to a customer, it is worth eleven million dollars, and it is in your building because you agreed to keep it there.

Most operators assume the commercial general liability policy handles this. It does not, and the reason is a single clause: hangarkeeper’s liability insurance exists because standard general liability specifically excludes damage to property in your care, custody or control. Everything you are paid to look after is carved out of the policy you assumed was covering it.

What does hangarkeeper’s liability insurance cover?

Hangarkeeper’s liability insurance covers damage to aircraft owned by others while in your care, custody or control — stored in your hangar, parked on your ramp, or undergoing service. It responds to fire, ground-movement collision, hangar rash, falling objects and employee negligence, filling the care, custody and control exclusion in a commercial general liability policy.

Who needs it

The test is not what you call your business. It is whether other people’s aircraft are ever in your possession.

The two structures, and why the difference matters

This is the part that gets glossed over in a quote comparison, and it is where two policies that look alike behave completely differently after a loss.

Legal liability form. The policy responds only if you are legally liable for the damage — that is, if negligence can be established. If a hailstorm collapses the hangar roof onto three customer aircraft and nobody was negligent, a legal liability form may not respond at all. The customer’s own hull insurer pays, and then, quite possibly, comes looking for you anyway.

Direct primary form. The policy responds to covered damage regardless of fault. It costs more. It also removes the argument, which is precisely what you are buying — because the argument happens at the worst possible moment, with a customer standing in your hangar looking at their damaged airplane.

Two hangarkeeper’s policies at the same limit can be a factor of ten apart in what they actually pay. The limit is the number people compare. The form is the number that matters.

How the limits are structured

Hangarkeeper’s limits are written two ways at once, and both have to be right.

There is a per aircraft limit and a per occurrence limit. The first caps what the policy pays for any single airframe. The second caps what it pays for one event, no matter how many aircraft that event touches.

The failure mode is easy to describe and expensive to discover. An operator carries a limit sized to the most valuable aircraft it ever handles, which feels prudent. Then a hangar fire involves six aircraft simultaneously, the per-occurrence limit is exhausted well before the individual claims are, and the shortfall lands on the operator. Set the per-aircraft limit against the most expensive airframe you will ever accept. Set the per-occurrence limit against the worst night your hangar could have with everything in it.

One more structural point, because it decides who actually pays. Hangarkeeper’s is excess over the aircraft owner’s own hull policy in most placements — the owner’s insurer pays first, then looks to you for what it paid. That subrogation claim is the real-world shape of most hangarkeeper’s losses, and it is why the limit needs to contemplate not just the damage but the recovery action that follows it. A hangar lease or service agreement will often try to shift that burden by contract; whether your policy actually responds to a liability you assumed in writing depends on how the contractual liability language is drafted, and it is worth reading before signing rather than after.

The coverage also has edges worth knowing before a claim finds them: aircraft in flight generally fall outside it, subcontracted work may not be picked up, and aircraft left on the field after hours can raise questions about whether they were in your custody at all. None of these are unusual. All of them are worth resolving at placement rather than at loss.

Placing it properly

Hangarkeeper’s is rarely bought alone. It sits alongside premises liability for the facility itself, products and completed operations if you perform work, and the broader aviation general liability program that responds when the injury is to a person rather than an airframe. Written separately by separate parties, those policies develop gaps between them — and the gap is always discovered by a claim.

USADG is a specialized independent insurance broker to the aviation, aerospace and defense community. It places and structures hangarkeeper’s and aviation liability programs with A-rated underwriting partners, and it advocates for clients on claims. The value in a specialist is knowing which form to write, where the per-occurrence limit should sit for your actual operation, and which endorsements close the seams between policies before anyone needs them to. The lines are set out on the USADG coverage page.

Nobody reads the care, custody and control exclusion until the wingtip is already bent. It has been in the policy the whole time, doing exactly what it says.