A flag hangar served as a personal hangar aboard Imperial Star Destroyers. This was a place for a high-ranking admiral from the Imperial Fleet to reside during visits to a specific vessel. The admiral's private living spaces were situated in close proximity to this hangar.
Booster Terrik maintained control of the Flag Hangar on the Errant Venture, using it as his personal space. It was there that he encountered Han, Leia, Lando, Corran, Mirax, Iella, Wedge, and Myri following their departure from Corellia.