Drones are becoming popular among hobbyists and businesses alike. They can be fun to fly as a hobby and a valuable tool for business – especially when it comes to things like photography. But, did you ever stop to think about the risks involved with owning or operating a drone, or how your insurance would respond in the event of an accident?
We will first look at this from the standpoint of “personal use” and how a homeowner’s policy might apply to a loss. Then, we will focus on “business use” and how the commercial general liability policy might apply to a loss. In both instances, the ISO coverage forms will be used as the basis of discussion – homeowner’s form HO OO O3 (05-11) and commercial general liability form CG OO O1 (04-13). There are insurance companies that do not use these standard coverage forms, so coverage may vary from company to company.
Believe it or not, the word “aircraft” appears 12 times throughout the standard ISO HO-3 coverage form! This policy defines an aircraft as “…any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo.” So, in the case of the homeowner policy, a model airplane or drone is NOT considered an aircraft and is therefore covered – both for loss to the drone and for liability arising from its use. It is important to understand that there may be limitations or exclusions that apply depending on circumstances surrounding the specific loss. Always remember that insurance policies vary from insurance company to insurance company so it is important to understand exactly how yours works
Commercial insurance works differently. With a couple very limited exceptions, “aircraft” is excluded BOTH in the standard commercial property forms (ISO coverage form CP0001 04-13 and special causes of loss form CP1030 10-12) and in the standard commercial general liability form (ISO form CG0001 04-13). In other words, no coverage for the drone itself and no coverage for injury or damage it causes! But wait - there’s more! To clarify the insurance company’s intent that they are not providing coverage for risks arising from the use of aircraft, many policies are now being issued or renewed with ISO form CG2109, CG2110 or CG2111 that specifically exclude unmanned aircraft, or drones.
If your business uses drones you may be able to obtain coverage by asking your insurance carrier to add a form such as ISO CG2450 that can grant limited coverage for a particular unmanned aircraft and a particular project or operation.
CLICK here or call us at 800-220-5582 for more information regarding insurance for drones!