Insuring Emerging Technology: Drones For Business and Recreation

Posted by Broome Associates on June 3, 2015

A growing consideration for businesses is the use of a drone. Lately in the news as privacy issues, drones are often used for noncontroversial purposes. The vehicles are becoming more popular as even small businesses are getting on board for retail, transportation, surveying, and contracting uses. Are you one of these people who are implementing the use of this new technology, or are you considering using one?

By definition, a drone is an unmanned aircraft – more formally known as unmanned aerial vehicles (UAV). As an owner/operator of a drone you should know and understand the duties and regulations of ownership. How do you plan to use your drone: in your business; or for personal recreation and/or hobby?

Both uses pose questions of liability, including privacy issues and insurance coverage issues. ​Recently, as reported by news media, an individual who was flying a drone in a park outside the White House was apprehended by U.S. Secret Service agents. The drone could stream images back to its operator, which raises questions: violation of Federal Aviation Administration rules, possible breach of security, and invasion of privacy.

Presently under the FAA rules, businesses that use drones for commercial purposes must obtain a waiver to operate drones. Several insurance carriers have received preliminary approval from the FAA to test drones for claims and underwriting purposes. Drones can survey sites damaged by catastrophic occurrences of fire, tornadoes, and hurricanes. Not only could an adjuster appraise hail damage to a roof using a drone but a roofing contractor could also estimate roof damage for replacement and/or repairs.

When insuring a drone, there are questions of protecting the owner in regards to property and persons. How does your commercial or personal policy respond to property damage or bodily injury as a result of your operation of a drone? Your insurance agent can help you understand your policy coverage forms and guide you through the process for your business to make use of this new technology.

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