Otus insularis is threatened by logging despite much of its habitat falling within the Morne Seychellois National Park, although habitat encroachment from real estate development may prove to be a greater threat.
Otus insularis is endemic to upland, often mist-shrouded forest (virtually all records are in secondary forest at 250--600 m) on Mahé in the Seychelles.
Otus insularis needs clefts in hills with water where its tree frog prey occurs.
Fieldwork in 1992--1993 showed a Otus insularis population of 80 pairs (though reports from elsewhere suggest this may be a minimum).