Your business does not own or utilize drones during the course of business but you allow independent contractors to use drones. If there are claims for liability because an independent contractor operating a drone injures someone, will the independent contractor’s general liability insurance respond? If not, will your general liability insurance respond? The likely answer is that neither policy will respond.
Under the commercial general liability (CGL) policy, drones also known as Unmanned Aerial Vehicles (UAV) are classified as “aircraft”. An unendorsed CGL policy states that “aircraft” is excluded.
As an example, let’s say you own a facility that has weddings. There are a dozen independent contractors also involved in that wedding. You have obtained certificates of insurance from all of them naming your facility as an additional insured including the photographer who will be operating a UAV (drone). Even though the photographer has CGL insurance, it is likely that the liability exposure related to the drone is not insured. During the event, if the drone injures a guest, there would be no coverage from injuries sustained by the drone under the CGL. That leaves you (the owner of the wedding facility) to possibly be responsible for those injuries. As mentioned before, it is likely that your insurance will not respond to this claim either.
As the use of drones becomes more prevalent, it is incumbent upon business owners to research whether their insurance, as well as anyone they are working with, has the proper coverage in place. Real estate agents, insurance companies, agricultural businesses, media, photographers, contractors, manufacturers are routinely using UAVs. They either need to obtain an endorsement to provide liability coverage for this exposure or obtain UAV insurance.
In the above, commercial property coverage for UAVs was not addressed, and homeowners insurance for personal drones was not mentioned either. They are handled very differently and are a topic for another article. When you are operating UAV for commercial purposes, keep in mind that the FAA (Federal Aviation Administration) also has requirements as well as State and Federal laws, which include financial responsibility.
For more information on the usage of drones in your business (whether it’s your drone or someone else’s), contact HWP Insurance for more information and we can help design a program that provides you with adequate protection for this increasing exposure.
