UAV Insurance

About Insuring Your UAV

You may have seen them floating in the sky right above your home, or over an open field, or in the news - because Unmanned Aerial Vehicles are becoming popular. It has been estimated that in just a mere four years, there will be over 7,000 drones flying in the skies. There are questions about the legality of drones flying over certain regions of airspace. The Federal Aviation Administration (FAA) is responsible for the safety of U.S. airspace - and Commercial operations are authorized on a case-by-case basis. In 2012, Congress told the FAA to come up with a plan for “safe integration” of UAS (unmanned aerial systems) by September 30, 2015. Safe integration will be incremental. The agency is still developing regulations, policies and standards that will cover a wide variety of UAV users, and expects to publish a proposed rule for small UAV – under about 55 pounds – later this year. That proposed rule will likely include provisions for commercial operations^[1].

Years ago, drones were considered something only the military would operate, but like any technology, they too have become a product that businesses, and the general public, has an interest in. Once you have obtained a UAV, whether for personal or business use, you need to obtain an insurance policy that fits your needs.

Given the inherent risk involved with the operating an UAV, at a very minimum, operators should purchase Liability coverage. If your UAV is of the more expensive variety, then Physical Damage coverage should be considered.

Liability Coverage:

Bodily Injury Liability - pays on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages, because of Bodily Injury sustained by any person.

Property Damage Liability - pays on behalf of the Insured all sum which the Insured is legally obligated to pay as damages, because of Property Damage

Medical Expense Coverage:

Medical Expense – Pays reasonable Medical Expense incurred within one year from the date of injury, to or for any crew who sustains Bodily Injury caused by an Occurrence involving an Unmanned Aircraft, provided the Unmanned Aircraft is being used by or with permission of the Named Insured.

Physical Damage Coverage:

Ground and Flight - Pays for any Physical Damage Loss to the Unmanned Aircraft, including Disappearance of the Unmanned Aircraft

Not In Flight - Pays for any Physical Damage Loss to the Unmanned Aircraft sustained while the Unmanned Aircraft is not In flight and which is not the result of fire or explosion following a crash or collision while the Unmanned Aircraft was In flight.

Not In Motion - Pays for any Physical Damage Loss to the Unmanned Aircraft sustained while the Unmanned Aircraft is not In motion and which is not the result of fire or explosion following a crash or collision while the Unmanned Aircraft was In motion.

As you have read above, Liability coverage addresses Bodily Injury/Property damage you are held liable for and Physical Damage pays to replace the equipment you’ve managed to destroy. A person flying an UAV for pleasure may not need any additional coverage but those operating a business flying or manufacturing UAV’s, need to consider other exposures. The products or services you provide will dictate the type of coverage you will require.

Other Lines of Coverage:

• Products Liability – For Manufacturers
• Product Recall – For Manufacturers
• Cyber/Data Breach Coverage – Services Companies collecting personal information including photos/film
• Workers Compensation – All companies with employees

Regardless of what type of protection you feel is suitable, it’s a wise idea to speak in depth with an insurance professional versed in UAV insurance coverage. To learn more contact us.

Helpful Links/articles:

http://www.faa.gov/about/initiatives/uas/uas_faq/

http://www.huffingtonpost.com/2014/07/11/drones-arrests

http://en.wikipedia.org/wiki/Unmanned_aerial_vehicle

References:

1. "Busting Myths about the FAA and Unmanned Aircraft" (http://www.faa.gov/news/updates/?newsId=76240)