How Commercial Drone Use Creates a New Liability for Businesses

In August of 2016, Federal Aviation Agency Rule 107 went into place, which allows non-recreational operators to fly drones in U.S. airspace assuming that they complete a certification process. While this opened up the door for insurance carriers to consider using drones as inspection technology to strengthen underwriting, it also opened up the floodgates for millions of other drones to fly the skies. In 2016, the commercial drone market grew by 86 percent. The FAA estimates that there could be as many as 2.7 million commercial drones in use by 2020.

Commercial Drone Use Creates a New Liability for Businesses
With a growing number of drones in use for inspection technology, businesses are now presented with a new liability related to drone use. What would happen if a drone caused property damage or bodily injury? Any business using a drone for commercial purposes needs to consider these risks and determine how liability would be handled.

It’s critical that businesses understand their liability coverage and any areas where they are left vulnerable. The typical commercial insurance policy does not offer coverage for drone damage, which is why we’ll see a number of insurance carriers begin to offer drone liability endorsements.

The Danger of Not Understanding Insurance Coverage
We’ve talked about the danger of insureds not having a clear understanding of what their insurance policy covers. An alarming number of businesses are unsure about their property coverage and don’t know if supplemental coverage is needed. This is true for homeowners as well as 50 percent aren’t sure how their insurance provider would calculate the costs if their property was to become damaged.

Insurance carriers today typically have limited contact with insureds. As a result, insureds may have some unanswered questions surrounding their policies and may unknowingly be vulnerable in a number of areas. While there is a lot of hype these days about inspection technology, conducting an in-person property inspection will provide insurance carriers with an opportunity to strengthen relationships and minimize risk by identifying other areas to serve insureds.

How Insurance Risk Services Can Help
Insurance Risk Services offers a full range of insurance inspection services and underwriting support–including in-person property inspections–to help insurance carriers best determine which risks are worth taking. As commercial drone use continues to grow, our seasoned professionals will partner with insurance carriers to help them determine how to best approach drone liability coverage.

Please contact us at Insurance Risk Services to learn more about how we provide insurance carriers with accurate underwriting support that they can depend on.