Whether you’re hiring a drone operator for your project or are a drone operator who is asking yourself, “What insurance do I need for my drone business?”, this article will get you pointed down the right path.
I asked “The Drone Insurance Guy”, Evan Garmon, what are the keys you need to know.
Note that I am not providing insurance advice and you should consult your insurance agent for your specific needs. Evan has specialized in insurance for drone operators and so you should consider him as a resource when trying to sort out your options.
Here’s what he said.
What is Drone Insurance and Why is it Necessary?
Drones (otherwise known as UAV’s or Unmanned Aerial Vehicles) are here to stay and will change the airspace as we now see it. This innovative technology does not come without risk to the operator and to the general public, hence the reason UAV insurance is now an insurance product.
While operators in much of the United States (except for Minnesota) are not required to have a policy in place to cover commercial operations, it is still wise to have liability coverage.
When contracting a UAV operation whether it be for aerial photography of real estate, marketing purposes, inspection, or any other currently unknown uses, there are a few things to look for when asking for proof of coverage and the insurance certificates of UAV operators.
What Insurance is Needed and How Do You Confirm Needed Coverage Are In Place?
The Form. UAV insurance certificates do not look like the standard Acord 25 form that most see when asking for proof of coverage. UAVs are primarily insured on adapted aircraft policies and have a separate insurance certificate that can apply. The form number is the Acord 21 and will have a summary of the drones insured on the policy.
Confirm Insurance Is Current. If you’re hiring a drone operator you should verify the policy is currently in force by calling the insurance agent on the form and verify the information is accurate and up to date.
Make Sure The Specific Drone Being Used Is Covered. When looking over the aircraft coverage section, ask the operator if they will be using the unit displayed in the box or any of the other units that may be shown on another page of the certificate. An FAA registration number or UAV serial number may be displayed in the box, but make sure that the unit the operator intends to use is the same on the certificate.
$1,000,000 Limit Suggested. UAV policies currently on the market typically cover bodily injury and property damage due to a UAV crashing into a person or property. The most common limit is $1,000,000, but some policies may be written for $500,000. As best practice, Harpenau Insurance Agents do not recommend UAV operators insuring their drones liability for less than $1,000,000 since most contracts require a minimum $1,000,000.
Damage to Drone Coverage Section. Section two of the UAV policy has available coverage for the UAV itself with limits as high as the operator needs. This limit will be displayed in the Aircraft Hull limit box and will vary from unit to unit depending on the value the operator wants to cover their unit at. While not completely relevant for many to verify, it may be an indication of the operators ability to quickly purchase another aircraft in the event of an accident, thus requiring extended time to complete the work until they can either get the funds to replace the downed unit, or go purchase another one.
Other Coverages. Other coverage that may be shown on UAV certificates will be:
- Medical payments coverage for small accidents that may require a trip to an urgent care clinic.
- Premises liability coverage that will insure that if something happens to someone or their property while the UAV is operating and does not cause the damage, accidents can still be covered.
- Personal injury coverage is a misnomer and is actually coverage for lawsuits involving invasion of privacy, libel & slander, and copyright suits. This is an important coverage to make sure the operator has due to the public perception of drones spying on people.
Additional Insured. While many request operators to show only proof of coverage, having specific language in an agreement to be added as an additional insured to the UAV policy is a great risk management practice for contractors of UAV operations to implement. Being added as an additional insured is often no cost to the operators and will make sure that if an accident occurs, you operation will have coverage under their limits as well.
Official Policy vs Insurance Certificates. It is important to note that just because the coverage is on the certificate as well as any special language in the description of operations box, it does not mean the representation is part of the official policy. Certificates of insurance are issued as a matter of fact for information purposes only. If you have questions about the operators coverage, discuss with their insurance agent the coverages they have in place. Some policies will not recognize additional insured status until the agent reports the request to the insurance carrier.
For More Information Or Insurance Questions For Your Specific Situation
Drones are here to stay and will soon be a more common part of life delivering package, recording events, and possibly saving lives with medical device delivery already being tested. If you have questions about drone insurance or would like to learn more about insuring drone operations, please contact Evan Garmon at Evan@harpenauinsurance.com
Evan Garmon is an Insurance and Risk Management Professional at Harpenau Insurance Agency in Indiana. Since 2015, Evan has specialized with insuring UAS operations across the United States. As a hobby drone pilot himself, Evan loves hearing clients stories and chatting about the latest technology. With a solid team backing him at his agency and partnered insurance carriers, Evan is proud to be a one stop insurance solution for his clients.
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Photo credit: Foter.com