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Agents & Brokers, Cyber Security
Using a Drone in Your Business: Insurance May Not Cover You for Accidents
A condominium developer wants to sell units in a building still in the planning stages. What better sales tool than a photograph depicting what the view will be from each unit?
With today’s drone technology and digital photography, that is an easy project to complete. Just send a drone up, taking panoramic pictures every 10 feet up, and download them all onto your website.
What could go wrong?
The most obvious risk is a crash. Drones used for photography are small and light, under three pounds and only a few feet wide, but if they crash they can damage property and cause accidents. But drones used for other purposes, such as to spray fertilizer over crops, are much bigger and heavier.
Secondly, the drones may take pictures that violate privacy. This is particularly applicable to construction of residential towers in large cities, where drones might photograph into windows dozens of stories high, where the residents expect to be well beyond the view of others. They surely do not expect such photos to be posted on the internet.
Finally, there are a host of other unknown risks which are inherent in new technologies. What if the radio signal controlling the drones gets hacked? Who becomes responsible then? What about errors in their use, such as misrepresenting the view they supposedly photographed, or spraying fertilizer over the wrong field?
The role of insurance has been to protect business in the event of such unforeseen accidents. However, in the past, if a business owned an airplane, it would buy a specific insurance policy for that airplane. No one expected the off-the-shelf General Liability or Property policy to cover that airplane. Because of this, General Liability policies specifically exclude “bodily injury or property damage arising out of the ownership, maintenance, use or entrustment to others of any aircraft.” The same is true for autos and watercraft.
So, are drones considered aircraft? Yes they are, according to the National Transportation Safety Board. On November 18, 2014 the NTSB ruled that, “an aircraft is ‘any’ ‘device’ that is ‘used for flight’.” (See Hueta v. Pirker below.)
So that leaves businesses wondering: how do I protect myself with insurance if I plan to use drones? This is a rapidly evolving issue. Contact your broker at Propel Insurance with questions. We can help.
Additional Resources:
Documents related to the Pirker case from NTSB: http://www.ntsb.gov/legal/alj/Pages/pirker.aspx
Press release from FAA regarding Pirker case: http://www.faa.gov/news/press_releases/news_story.cfm?newsId=17734
