Abstract: The new dual circulation pattern has put forward higher requirements for the development of China’s aviation industry. The establishment of large aircraft project and the successful development of the C919 large aircraft indicate that China’s aviation industry has made qualitative progress. As an important industry in the high-tech field, aviation industry should be the focus of the future economic development of all countries and the improvement of the rule of law on aviation insurance can provide guarantee for the development of this industry. Through the analysis of the Montreal Convention 1999, the paper finds that the scope of compulsory liability insurance for air carriers in China is obviously smaller than the provisions of international conventions, and there are some other problems. For example, the parent law of aviation needs to be improved; there is only the provision of liability insurance for the third party on the ground; and the legislation of the liability insurance is missing. International law is more likely to reflect the legal principles or rules generally accepted by all countries because of its characteristic of international integration in its formation process, so it has special significance of being absorbed and used for reference. In view of this, China’s relevant legislation can be carried out in line with international standards while improving relevant legal regulations, clarifying the minimum limit of liability insurance, and protecting the rights of the insured.