Commercial Insurance Blog

Do I have coverage for my drone?

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Technology is moving so fast that laws and the insurance industry cannot keep up. This creates a huge exposure, especially with respect to drones.

What is a drone? Something that flies without a person.

The Federal Aviation Administration (FAA) defines an unmanned aircraft as “an aircraft operated without the possibility of direct human intervention from within or on the aircraft.” (Sec. 331(8) of Public Law 112‐95)

There are many industries in which drones prove useful:

  1. Construction

  2. Engineering

  3. Insurance assessments

  4. Mapping/geophysical survey

  5. Parcel delivery

  6. Photography/videography

  7. Realtors

Regulations in the past only addressed a manned aircraft with passengers, as well as cargo planes or hobby aircraft for recreational purposes.

In 2015 the FAA authorized approval for the use of drones for commercial or business use which took effect August 29, 2016. This approval allowed small unmanned aircrafts to be operated in commercial operations. However, that came with a long list of do’s and don’ts regarding speed, height, transporting, etc.

In response to the FAA, new laws were put in place with mandates.  Drones are prohibited in:

  • Hunting or locating animals as game

  • Operating weapons

  • Voyeurism & violating ones privacy

  • Interfering with aircrafts

As it stands now, the insurance industry has Commercial General Liability language that addresses drones as follows:

Two coverage parts

Coverage A – Bodily injury/property damage liability

Coverage B – Personal and advertising injury

Standard CGL includes an aircraft and watercraft exclusion for Coverage A -  Removes coverage for liability arising out of the ownership, maintenance, or use of aircraft or watercraft that is owned, operated by, rented to, or loaned to an insured.

Coverage B has no specific aircraft exclusion. 

In Federal lawsuit: Boggs v. Merideth, No. 3:16‐cv‐6‐DJH (W.D. Ky. Filed Jan. 4, 2016), a man shoots down a drone as it hovers over his teenage daughter while she is sunbathing.  What may seem like a typical, fatherly reaction is not supported by law, as the air space above your land is considered national airspace, which is federal jurisdiction. In other words, it might be your back yard but it's not your space.

This law suit continues as the legal system, federal law and the FAA work to address new drone suits.  As drones grow in popularity, so do the number of filings. The commercial use of drones is not illegal but it is restricted unless you get a Certificate of Authorization from the FAA. Insurance coverages that include liability, personal injury, invasion of privacy, property, and workers compensation are all areas that the carriers are working to collect data on in hopes (or not) of entering the drone insurance market.   

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