GeneralAverage

Does every aerospace business need aircraft insurance under federal rules?

No universal rule is supported here. FAR 28.307-2(d) addresses aircraft public and passenger liability when aircraft are used in contract performance and the contracting officer requires the stated terms.

Read the actual solicitation and contract, identify whether aircraft are used in performance, and confirm the requested clause with the contracting officer. The requirement depends on that context.[3][1]

If a clause applies, have a broker map its limits and scope to a specific policy and declared operation. Do not substitute generic CGL or product-liability wording for an aircraft-specific requirement.[3][1]

Read the Aviation and Space Insurance Buying Guide

Sources and Further Reading for Aviation and Space

  1. Commercial Insurance Guide — California Department of Insurance. Revised June 14, 2024: commercial property, inland marine, boiler and machinery, commercial general liability, products/completed operations, commercial auto, umbrella, and workers compensation.

    California commercial guidance for general property, inland marine, CGL, umbrella, and workers compensation concepts.

  2. Financial Responsibility — Federal Aviation Administration. Commercial Space Transportation: launch/reentry licenses and permits, maximum probable loss, and financial-responsibility evidence.

    FAA explanation of launch/reentry financial responsibility and the scope of maximum probable loss estimates.

  3. 28.307-2 Liability — Federal Acquisition Regulation, Acquisition.gov. FAR 28.307-2(a)-(e), FAC 2026-01 effective March 13, 2026; contract-context workers compensation, general, auto, aircraft, and vessel terms.

    Conditional federal contract insurance terms; check the contract and aircraft use.

Spot, a product of Tools for Enlightenment, publishes this guide and works in the commercial insurance market. This is general buyer education; policy terms and state-specific obligations determine coverage and requirements.

Updated 2026-09-28. Editorial Policy

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