Drones and Insurance: Is Your Business Protected?

It used to be that only the U.S. military used drones in their business. Not any longer. In 2016, individuals and businesses have close to 1,000,000 drones and they do represent a significant liability exposure.

For now, let’s just take a look at drones used for business. Many businesses already use drones and the number is increasing daily. Drones are used by farms, construction companies, film and production companies, real estate agencies, utility companies and more. Does traditional business insurance cover this new exposure? The answer is NO.

Insurance companies have interpreted the use of drones the same as any other aircraft and aircraft coverage is always excluded from standard liability policy. This is potentially a serious problem. If your business uses a drone and there is an accident, unless you have purchased separate coverage for the drone, you are not protected. Drone accidents have caused injuries to property, injuries to people and in some cases, even death. What would be the cost to your company if your drone is involved in such an accident?

The problem as I see it is that many businesses are using drones on a limited basis believing that their current insurance will respond if there is a problem. That is not the case. I have talked with several people in the last week that I know have used a drone in their business and none of them had a clue that their insurance policy excluded coverage for drone use.

Here is another possible problem: What happens if you have another business perform a service for you using a drone and that drone is involved in an accident? Most people would say that all the liability would fall on the business that used the drone. Perhaps. But what if they didn’t have drone coverage? If you didn’t request a certificate of insurance from that business which specifically listed drone coverage, you might not be safe.

There is good news. Drone insurance, though new, is not expensive and several carriers are now offering standalone coverage or in some cases, the coverage can be added onto the existing policy. So, if your business uses a drone, give me a call.