What is Commercial UAS Insurance?
Unmanned aerial systems (UAS), familiarly known as “drones”, are often associated with either military operations or backyard recreation. Drones are beginning to make their way into the business world in a variety of ways, delivering goods, capturing images, and collecting data. Though they are not legal for commercial use in general, the FAA does review and grant permission to use drones on a case-by-case basis while they move toward a more general recognition and legalization of commercial drone use.
The increased use of drones has also sparked interest in the insurance world. Insurance underwriters are quickly creating drone insurance policies, both stand-alone and add-on, that cover the unique issues of safety and security that drones generate.
Drone Safety and Security
One of the key issues of safety and security that the FAA is trying to deal with has to do with the navigation system inside drones. All drones, whether they are inexpensive or military-grade, have the same Global Positioning System (GPS) technology inside of them. GPS allows you to locate and maneuver the drone anywhere. However, the GPS system on the drone also allows you to fly your drone much higher into the sky and beyond the line of sight. This is both dangerous and illegal. Not having visual contact with your drone could result in serious accident or injury to people and property. Flying the drone too high could cause a collision with small aircraft or even large planes. Current restrictions for personal drone safety include not flying in restricted airspace, keeping the drone within the field of vision, and not flying above 400 feet.
While still technically prohibited, the FAA provides limited exceptions for companies to use commercial drones. Requests are reviewed and permission granted on a case-by-case basis, and exceptions have been allowed for agricultural monitoring, aerial surveying, real estate photography, and even the film industry.
The Need for Commercial UAS Insurance
The decision to use drone technology means protecting yourself and your business with drone insurance. Like other types of targeted business insurance, drone insurance protects your business, employees, and property when an accident or incident results in damage or injury. It also protects you if your drone causes damage to someone’s personal property.
Additionally, drone insurance policies cover damages related to privacy issues. One of the major questions with drone usage, and one that is still being defined, involves the potential violation of people’s privacy rights. Privacy claims fall under personal injury, which is why your drone insurance policy or add-on coverage should include personal injury claims insurance.
Looking to the Future
As most of the major insurance companies continue to watch for the FAA’s next move regarding commercial drones, they are also carefully researching and formulating new types of coverage, a difficult task with no claims experience to base it on. Though commercial drone use has yet to be legalized, insurance companies are also looking at the kinds of information that will determine insurability, including what the drone will be used for, how it will be used, where it will be taking off from and landing, where it will be flying and at what altitude.
Insurance companies may also be some of the biggest users of commercial drones in the future. Drones have the ability to fly into areas hit by major disasters, such as hurricanes, fires or nuclear spills, and can assess the damage long before an insurance agent would be able to get in there.
The future of commercial drone insurance is a bright one. As the FAA continues to review and regulate, more businesses are being permitted to take advantage of this useful technology. The increase in drone use has stimulated the insurance industry, driving them to craft new kinds of insurance endorsements and explore claim scenarios that not only will prepare for the eventual legalization of commercial drone use, but also for whatever new technology our future holds.
Poms & Associates offers a broad range of business insurance and brokerage services and provides the most current information on commercial general liability insurance policies, as well as additional coverage options such as drone insurance. For more details about the basics of business insurance policies, and to find out how Poms & Associates can help you choose the right drone insurance for your business, please visit our website or contact us.
Gabriella Messina is an author who has written online content for a variety of business and insurance related topics, including business insurance basics, workers’ compensation, liability insurance, and malpractice.