Do I Need Commercial Drone Insurance?
Currently the Federal Aviation Administration (FAA) doesn’t require insurance for commercial drone operators in the United States. However, drone insurance is something you should seriously consider to limit your risk exposure.
Two basic Type of Commercial Drone Insurance
There are two basic forms of drone insurance; 1) insurance that protects the actual drone, in case you crash it! 2) insurance that protects you if the drone you are piloting crashes into another person or their property is damaged.
Hull Insurance- Insure the Actual Drone
“Hull insurance” covers damage to the drone itself. Hull insurance becomes more and more important as the cost of UAV’s – Drones continues to skyrocket. For instance, a Cinema company, Brain Farm, spent early $250,000 developing its own drone!
In other words, Hull Insurance provides protection for physical damage to your drone in the event that you crash it!
Liability insurance covers damage caused to a third-party by your drone, including bodily injury and property damage. Liability insurance is usually required by companies setting up an in-house operation. Many companies also require service providers to show proof of liability insurance before contracting drone outside services.
The first step: determine if the drone is non-owned or owned by your company.
For non-owned drone operations you should secure a Non-owned UAS liability policy. This type of policy provides contingent third party liability coverage. UAS liability insurance offers coverage for a third-party bodily injury or property damage claim arising from the use of the drone on your behalf. The drone operator’s policy serves as the primary layer of insurance (the first layer to respond to the claim), while the drone pilot’s insurance will act as an excess layer, providing back-up insurance.
For example, let’s say you hire a drone operator to film for you and the drone crashes, causing a personal injury or property damage to a 3rd party (perhaps a bystander) that sues you for those damages.
For drone pilots who own the drone they are piloting they should seek a Hull and liability policy. This policy provides third party liability coverage (like the non-owned policy), however, it will not be contingent. Your policy will be the first level of protection against a claim.
Aircraft Insurance Policies — claims or suits that arise out of the ownership, maintenance, or use of aircraft are generally excluded under the standard commercial general liability (CGL) forms. Businesses that elect to use private aircraft in their operations must purchase specialty insurance to cover their aircraft liability loss exposure: aircraft liability coverage or stand-alone nonowned aircraft liability and perhaps excess aircraft liability coverage as well. Coverage for third-party aircraft liability is often provided, which also includes hull (physical damage) and medical payments coverages.
Confused by commercial drone insurance and how it should be incorporated into your business? Contact us at the Dunaway Law Group by phone at 480-389-6529 or email at firstname.lastname@example.org.