What insurance does a charter operator carry?

Federal law sets a floor for a charter operator’s insurance, and for an eight-seat business jet the floor is $850,000 of combined cover. A policy that meets it is legal. This page gives the figures, what they cover and what they leave out, so you can ask the operator for the real limits instead of assuming them.

The short version

• The floor is set by 14 CFR Part 205. It applies to every US direct air carrier, air taxi operators included.
• Most business jet charters fall under the air taxi limits. Passenger cover is $75,000 times 75% of the seats installed, and third-party cover is $300,000 per accident, plus $100,000 for property.
• It covers injury, death and property damage. It does not refund a cancelled or delayed flight.
• The certificate is the proof. It has to list the aircraft by type or by registration.
• A minimum is not a limit on liability. Ask what the operator carries above it.

What insurance does a charter operator have to carry?

Aircraft accident liability insurance, and nothing else is required by this rule. 14 CFR 205.3 says a carrier shall not engage in air transportation unless it has that coverage in effect, and 205.4 says an aircraft shall not be listed in its operations specifications, or operated, unless coverage for it is in force. The coverage pays for “bodily injury to or death of a person, or for damage to the property of others, resulting from the carrier’s operation or maintenance of aircraft”.

Part 205 sets minimum amounts by the kind of carrier. A business jet operator falls in the smaller class unless it holds a certificate of public convenience and necessity or runs scheduled passenger service. 14 CFR 298.3 defines an air taxi operator as a carrier that does not use large aircraft, holds no certificate of public convenience and necessity, and runs no scheduled passenger service. 298.2 defines a large aircraft as one designed for more than 60 seats or more than 18,000 pounds of payload. A business jet is neither. Ask which category the operator holds; an air taxi operator registers with the Department of Transportation.

How much is the minimum for a business jet?

For a U.S. air taxi operator, 14 CFR 205.5(c) sets:

• Third-party liability, for people other than passengers: $75,000 for any one person and $300,000 per aircraft for each occurrence.
• Property: at least $100,000 per occurrence for loss of or damage to property.
• Passengers: $75,000 for any one passenger and a total per aircraft of $75,000 times 75% of the passenger seats installed.

The rule lets an operator buy a single combined limit, not less than all of those minimums added together. The table gives the floor by seat count. The totals are this office’s arithmetic on the rule, and the seat counts are examples.

A carrier above that class, one holding a certificate of public convenience or flying a large aircraft, falls under 205.5(b). Its minimums are higher: $300,000 per passenger, and a total for passengers of $300,000 times 75% of the seats installed, with third-party cover of $2,000,000 for an aircraft of up to 60 seats. An air taxi operator’s minimum is the smaller one.

What does the rule protect you from?

Three things in Part 205 are worth knowing before you rely on a policy:

1. Safety violations cannot void the minimum. 205.6 says a policy shall not exclude liability for violation of any safety-related statute or rule. The insurer can still recover what it pays from the operator.
2. Cancellation takes notice. A policy must stay in force until 10 days after written notice by the insurer, under 205.7.
3. The certificate names the aircraft. Under 205.3 it lists the types or classes of aircraft, or the specific aircraft by registration number. A certificate that does not list your aircraft is the kind to ask about.

What the rule does not do is say what a claim is worth. It sets what the policy must cover at a minimum. It does not cap what a carrier can be held liable for, and it does not tell you what the operator in front of you actually carries.

What happens if something goes wrong?

The claim is against the carrier, the operator holding the certificate, and the policy pays on its behalf. The rule is written that way: the insurer pays “all sums that the carrier shall become legally obligated to pay as damages”. A broker is not the carrier and has no operational control of the aircraft. What a private jet broker does lists what the broker is required to tell you, and Part 91 versus Part 135 explains why the operator’s certificate is the document that counts.

A flight that is cancelled or delayed is a different matter, and not one that the aircraft accident policy answers. That is decided by your charter agreement. When the plane breaks covers what happens to the trip.

What changes on an international flight?

The Montreal Convention can apply to a claim for death or bodily injury on international carriage by air. ICAO’s revision raised the first-tier limit from 128,821 to 151,880 special drawing rights per passenger, effective December 28, 2024. A special drawing right is an accounting unit of the International Monetary Fund, so the dollar figure moves day to day. Look up the day’s rate if the number matters.

What should you ask for in writing?

1. The certificate of insurance, with the aircraft that will fly you listed on it by registration or by type.
2. The combined single limit, and the passenger limit per seat. Compare them with the table.
3. The policy’s dates, so the expiry is after your trip.
4. Whether the operator can name you or your company as an additional insured. Some will; the rule does not require it.
5. The broker’s own coverage, if you are booking through one. The scam checklist asks for it.

Jet card, charter, fractional or owning covers the same rule from the owner’s side.

What Jake does

Lombardi Jet Services is a broker. Jake arranges flights with Part 135 certificate holders rated ARGUS Gold or Platinum, names the operator and the aircraft in the quote, and deals with the certificate holder.