Many commercial UAV operators think that a “standard” commercial general liability policy will protect them and their business. However, 99% of “standard” insurance polices exclude everything related to aviation. So, to begin this site, I have elected to post the basics of UAV insurance. Feel free to add input or ask questions.
Are you thinking about becoming a commercial UAV pilot under FAA part 107? If so, UAV insurance should be a main concern of your new business. A vast majority of “standard” liability insurance policies exclude anything that has to do with aircraft. Since UAVs are under the purview of the FAA, they are considered to be aircraft by most insurers. So how do you get your new UAV operation insured? Easy, contact an aviation specific insurance broker (I happen to be one). If this sounds intimating, you are not alone. However, once you understand the basics of insuring an aircraft, you will be an aviation insurance wizard.
The base policy in the aviation insurance industry is liability only. The limits on liability only policies range from $500,000 each occurrence all the way up to $5,000,000 each occurrence. However, if higher limits are needed, they can be negotiated. This liability coverage will protect you from any Bodily Injury or Property Damage claims that may arise from your operation of your insured UAV(s). Fly through a window while shooting a real estate video and land on somebody’s grand piano? Covered. Hit a passerby and cut their finger? Covered. After you have purchased liability coverage, and are looking for more protection, you can then add “hull” coverage to your policy with some of the aviation insurance companies.
Hull coverage is physical damage to your UAV itself. This is a “Stated” or “Agreed” value. Let us say you have a basic DJI Phantom 3 Professional that you have insured for $1000. You slam this aircraft into a tree and completely destroy it. The insurance company takes a look, sees that it will not be feasible to repair it, and they deem it a total loss. In this scenario, you would get a check for $1000 minus any applicable deductibles ( UAV deductibles are usually 5% – 10% of the insured value of the aircraft). Same logic applies to any other UAV. However, if you have an inspire 1, with a very expensive upgraded camera, you would want to “schedule” the aircraft and the camera separately. The upgraded camera can be added to most UAV insurance policies as “payload” equipment.
Liability and Hull coverage are the main coverages that you should be concerned with as a commercial UAV operator. There are some other “ancillary” coverages that I will address in future posts.
Thanks,
Joe Ernster
Bullock Agency, Inc.
joe@bullockagency.com
UAS Insurance 101 