Understanding Insurance for Fixed Base Operators (FBOs): What You Need to Know
Operating a Fixed Base Operation (FBO) is a critical part of the aviation ecosystem — providing fuel, maintenance, storage, and flight support services to pilots and passengers alike. But while you focus on offering safe, efficient service on the ground, your business carries unique risks that can’t be overlooked.
As both an experienced insurance agent and a private pilot, our ArcLight Insurance CEO Page Tofighi understands firsthand the operational challenges and exposures that come with running an FBO.
Here’s what every FBO owner and operator should know about protecting their operations with the right insurance coverage.
Why Insurance for FBOs Is Essential
FBOs operate at the intersection of aviation, hospitality, and maintenance — all of which carry liability. Whether you’re servicing aircraft, housing them in hangars, or welcoming customers to your facility, your business is responsible for the people, property, and planes on site.
Without the right insurance policies, even one claim could result in unnecessary challenges. Including:
- Major legal expenses
- Damage to aircraft in your care
- Worker injuries or customer slip-and-falls
- Breach of airport lease requirements
7 Core Insurance Policies Any Fixed Base Operator Should Have
Here are the most important coverages that every FBO should strongly consider:
1. General Liability Insurance
- What it covers: Bodily injury and property damage that occur on your premises or as a result of your operations.
- Why it matters: If a visitor is injured at your facility or a contractor’s property is damaged on-site, this policy helps cover legal and medical costs.
2. Hangarkeepers Liability Insurance
- What it covers: Damage to non-owned aircraft stored or maintained by your operation.
- Why it matters: FBOs often store and handle aircraft owned by others. If one is damaged while in your care — during towing, fueling, or storage — you could be held responsible.
3. Products & Completed Operations Liability
- What it covers: Claims related to services you’ve completed, such as fueling, maintenance, or repairs.
- Why it matters: If an aircraft experiences a malfunction due to faulty maintenance or improper fueling, this policy can help protect your business against claims.
4. Commercial Property Insurance
- What it covers: Physical damage to buildings, hangars, tools, fuel trucks, and other on-site business property.
- Why it matters: Aviation facilities contain valuable and often specialized equipment. This policy protects against fire, theft, weather damage, and other losses.
5. Workers’ Compensation Insurance
- What it covers: Medical expenses, lost wages, and rehabilitation for employees injured on the job.
- Why it matters: FBO workers often perform physically demanding tasks around aircraft, equipment, and fuel. Coverage is typically required by law and crucial to protecting your team.
6. Pollution Liability Insurance
- What it covers: Environmental cleanup costs and third-party claims related to accidental fuel spills or contamination.
- Why it matters: Fuel handling, waste disposal, and hazardous materials are common at FBOs. Pollution claims can be incredibly costly if not insured properly.
7. Airport Premises Liability
- What it covers: Injuries or property damage occurring on airport grounds that are not directly tied to aircraft operation.
- Why it matters: FBOs are responsible for much more than just aircraft — customers, vendors, and vehicles all interact with your property daily.
Meeting Airport Lease and Regulatory Requirements
Many FBOs lease space from municipalities or airport authorities. These agreements often include specific insurance requirements — including minimum liability limits and endorsements.
✅ Review lease contracts carefully with your insurance advisor to ensure compliance.
✅ Maintain certificates of insurance and update them annually to meet audit or renewal obligations.
✅ Confirm that all subcontractors (fuel providers, maintenance vendors, etc.) carry their own coverage.
At ArcLight Insurance Agency, we look out for all of these exposures for you so you can focus on running your FBO.
Risk Management Tips for FBO Operators
Here’s how to reduce exposure and ensure your policies are working for you:
- Inspect hangars regularly for safety hazards, fuel leaks, or maintenance issues.
- Train staff on fueling safety, aircraft towing, and spill response protocols. This is especially important for new staff. Ensure all staff understand the difference between jetfuel and 100LL. Teach them to recognize which fuel goes into which aircraft.
- Document services provided, especially maintenance and fueling, with clear timestamps and personnel signatures.
- Bundle your policies where appropriate to simplify management and potentially reduce premiums.
Risk Management Tips for FBO Operators
Here’s how to reduce exposure and ensure your policies are working for you:
- Inspect hangars regularly for safety hazards, fuel leaks, or maintenance issues.
- Train staff on fueling safety, aircraft towing, and spill response protocols. This is especially important for new staff. Ensure all staff understand the difference between jetfuel and 100LL. Teach them to recognize which fuel goes into which aircraft.
- Document services provided, especially maintenance and fueling, with clear timestamps and personnel signatures.
- Bundle your policies where appropriate to simplify management and potentially reduce premiums.
Protect Your Ground Game So Your FBO’s Operations Can Soar
Operating a successful FBO requires more than just great service — it requires foresight, compliance, and risk mitigation. The right insurance coverage doesn’t just protect your balance sheet; it builds trust with clients, airport authorities, and the aviation community.
At ArcLight Insurance, we specialize in aviation coverage and understand the nuances that make FBOs different. CEO Page Tofighi brings both aviation and insurance expertise to the table, helping you navigate complex coverages with clarity.
Let’s protect your operation from the ground up.
Schedule a free consultation below to review your FBO’s risk exposure and build a custom insurance package that works for your business.