Learn a few basics about commercial drones and insurance for commercial drones.
Read why commercial drones are on the rise and why you need drone insurance.
Technology continues to put it out there and change what and how things are done. Commercial drones are on the rise, literally, and have the potential to bring about huge societal transformation. Even with limits imposed by current Federal Aviation Administration (FAA) regulations, some businesses are already on board and regularly using drones in their operations. This is a new commercial exposure that requires a special insurance policy.
What is a drone? A drone is an aircraft without a human pilot on board. The technical term for a drone is unmanned aerial vehicle (UAV). A drone, or UAV, is part of an unmanned aircraft system. Generally speaking, an unmanned aircraft system (UAS) includes a UAV, a ground-based controller, and a communications system between the two.
What regulations apply to commercial drones? The FAA has jurisdiction over aircraft and its operation, inclusive of drones. FAA Part 107 rules outline requirements which commercial drone operators must follow. All drone pilots operating commercially in the state of Ohio are subject to the FAA’s Part 107 rules. Note that Part 107 rules limit commercial drone usage to small drones less than 55 pounds. The drone must be registered with the FAA. Drone pilots must pass an FAA knowledge exam and continually obtain a Remote Pilot Certificate from the FAA. (Refer to the FAA’s online website at https://www.faa.gov/uas/commercial_operators for full Part 107 guidelines.) It is a good idea to check with the law department of any municipality/governmental entity, including Ohio State Parks, to determine if additional restrictions apply or special permission is required. Be aware that the U.S. National Park Service bans drone flights, unless you have specific permission.
What businesses are currently using drones? A wide variety, some of which are wedding photographers/videographers, real estate agents, surveyors, insurance claims adjusters, construction project managers, infrastructure inspectors, farmers, and filmmakers. Commercial drone usage is expected to expand further when FAA regulations get more up to speed with technology.
Is there insurance coverage for drones? Aircraft, which includes drones, is excluded under all standard commercial insurance policies (CGL, Auto, Umbrella, Excess, etc.). Drone coverage is only available under a special aviation insurance policy. Currently, ballpark minimum premium for drone insurance is in the range of $800.00 to $1,200.00, depending on the value and use of the drone. Not only should you obtain physical damage coverage on the drone itself, you also need liability coverage for property damage, bodily injury, and personal injury. Any number of damaging occurrences involving commercial drone usage could give rise to either a physical damage claim or a liability claim. The drone could accidentally crash due to human error, mechanical breakdown, or a communication glitch. Respects personal injury, drone operators taking aerial images have increased risk of third party invasion of privacy claims. It is important for each insured to understand the risk exposures of drone usage and work with a professional, independent insurance agent to obtain special aviation insurance. Like any insurance coverage, aviation/drone insurance is subject to specific policy terms, conditions, limits, and exclusions.
Commercial drones are continually on the rise in terms of type and detail of work applications. Advances in technology, safety, and public awareness will likely influence updated commercial drone FAA regulations.
Your Trusted Choice Independent Insurance Agent at Richey-Barrett Insurance is your source for commercial insurance, including commercial drone insurance.