Terry Miller, President of Transport Risk Management, Inc. , Aviation Insurance Professionals, has written an in-depth article outlining the difference – a critical point for commercial drone operators.
“Often, insurance policies are defined not by what they cover, but by what they don’t,” writes Miller. “This is especially true for all-risk property and casualty policies. If something is not specifically excluded, you’re covered.”
Miller points out that almost all non-aviation specific property and casualty insurance policies, such such as Commercial General Liability (CGL) and homeowners, exclude coverage for aircraft. And since the FAA now includes drones and other UAS as “aircraft” – a definition tested by the National Transportation Safety Board and now firmly accepted – drones are now included in any exclusion of “aircraft.” A typical exclusion, says Miller, includes “‘Bodily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft…owned or operated by or rented or loaned to any insured. Use includes operation and ‘loading or unloading.'” Which pretty much covers it – if your general liability or homeowners policy excludes aircraft, any flying with a drone is totally uncovered.
While most people are accustomed to insuring their cars and boats separately, drone owners may not have realized the need for a separate policy. While aviation insurance is prepared for the drone market, standard insurance policies may not be able to deal with the special requirements of aircraft.
“Fortunately the aviation insurance market had begun writing policy language and was prepared to meet the needs of this exciting new aviation risk exposure,” says Miller. “But if they can insure it, why couldn’t standard insurance companies also respond to this need on behalf of their many insureds? Because aviation insurance is special, that’s why.”
“Aviation insurance is insurance coverage geared specifically to the operation of aircraft and the special risks involved in aviation. Aviation insurance policies are distinctly different from those for other areas of transportation and tend to incorporate aviation terminology, as well as terminology, limits and clauses specific to aviation insurance.”
In addition to checking out aviation specific policies, commercial drone operators may want to look into precision flight coverage, which may more easily billed directly per job. While there are several options for insuring your drone, Miller makes a valuable point – don’t count on the policy you already have to do the job.