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UAV Insurance Discussion

Discussion in 'General Discussion' started by Joe Ernster, Aug 25, 2016.

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  1. Joe Ernster

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    Hello,

    I have started this thread in order to generally discuss UAV insurance. Many commercial UAV operators think that a "standard" commercial general liability policy will protect them and their business. However, 99% of "standard" insurance polices exclude everything related to aviation. So, to begin this thread, I have elected to post the basics of UAV insurance. Feel free to add input or ask questions.


    Are you thinking about becoming a commercial UAV pilot under FAA part 107? If so, UAV insurance should be a main concern of your new business. A vast majority of "standard" liability insurance policies exclude anything that has to do with aircraft. Since UAVs are under the purview of the FAA, they are considered to be aircraft by most insurers. So how do you get your new UAV operation insured? Easy, contact an aviation specific insurance broker (I happen to be one). If this sounds intimating, you are not alone. However, once you understand the basics of insuring an aircraft, you will be an aviation insurance wizard.

    The base policy in the aviation insurance industry is liability only. The limits on liability only policies range from $500,000 each occurrence all the way up to $5,000,000 each occurrence. However, if higher limits are needed, they can be negotiated. This liability coverage will protect you from any Bodily Injury or Property Damage claims that may arise from your operation of your insured UAV(s). Fly through a window while shooting a real estate video and land on somebody's grand piano? Covered. Hit a passerby and cut their finger? Covered. After you have purchased liability coverage, and are looking for more protection, you can then add "hull" coverage to your policy with some of the aviation insurance companies.

    Hull coverage is physical damage to your UAV itself. This is a "Stated" or "Agreed" value. Let us say you have a basic DJI Phantom 3 Professional that you have insured for $1000. You slam this aircraft into a tree and completely destroy it. The insurance company takes a look, sees that it will not be feasible to repair it, and they deem it a total loss. In this scenario, you would get a check for $1000 minus any applicable deductibles ( UAV deductibles are usually 5% - 10% of the insured value of the aircraft). Same logic applies to any other UAV. However, if you have an inspire 1, with a very expensive upgraded camera, you would want to "schedule" the aircraft and the camera separately. The upgraded camera can be added to most UAV insurance policies as "payload" equipment.

    Liability and Hull coverage are the main coverages that you should be concerned with as a commercial UAV operator. There are some other "ancillary" coverages that I will address in future posts.

    Thanks,

    Joe Ernster
    Bullock Agency, Inc.
    joe@bullockagency.com
     
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  2. Joe Ernster

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    Hello,

    My new client just requested a Certificate of Insurance and to be added to my insurance policy as Additional Insured, now what?

    This is a common practice in aviation insurance. Simply call or email your broker and ask them to add your new client as Additional Insured. Your broker will need their name, address, and any extra verbiage they may need on their Certificate of Insurance. This usually can be done same day. However, brokers really do appreciate a couple days' notice as they are beholden to the speed of the insurance companies. Also, unless your broker can create their own COIs, this usually cannot be done on weekends. So, as with most things, it is best to plan ahead.

    You can also request what is called a "To Whom It May Concern" COI. Think of this as an insurance "card" that you would carry for your automobile. It does not add the client as AI, but it is proof of insurance for anyone who may ask. And it is lighter than carrying your whole policy!

    Some brokers will charge you a fee for adding Additional Insureds. If that is the case with your broker, it may be time to find a new one.

    Thanks,

    Joe Ernster
    Bullock Agency, Inc.
    joe@bullockagency.com
     
  3. Huskerfan

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    What are premiums for $500,000?
     
  4. Joe Ernster

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    Husker,

    A single UAV, with $500k in coverage, starts at $595 per year.

    Joe Ernster
     
  5. Huskerfan

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    So, $50 a month. Does that cover if my drone falls out of the sky and injures someone? or damages property? Can you give me more detail about exactly what it covers?
     
  6. Joe Ernster

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    Husker,

    Sorry, I am responding on a phone. I usually go into more detail. That will cover you for any property damage or bodily injury that you may cause through the operation of your uav. They also offer price breaks for multiple aircraft.

    Joe Ernster
     
  7. Phill2

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    I am covered by the liability insurance that comes with my home insurance PROVIDED I am not using it commercially.
    Covers property damage and public liability.
    The Drone itself is covered under my contents insurance but I'm not sure that would cover a crash.
     
  8. IronReel

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    Joe, how would you compare getting a standard annual policy vs something like Verifly which lets you just get coverage as needed? The biggest benefit I see is that it's one and done and you don't need to address for each flight. If you look at your $600 quote and estimate $50/mo that's about 5hrs of commercial fly time with the Verifly... interesting..
     
  9. Joe Ernster

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    IronReel,

    You are correct. If you want a "set it and forget it" type policy you should get an annual policy from an insurance broker. Also, annual aviation insurance policies give you the option of adding "hull" coverage and other "bells and whistles" that may not be available through Verifly. If you are flying a couple UAV jobs per month, and don't want to pay an annual premium, Verifly is a great choice. If you are often flying commercially, or you have more than 1 UAV to insure, it may become problematic. Another thing to consider is that many of your clients will want to be added to your insurance policy as Additional Insured (and request a Certificate of Insurance). I am not sure that can be done with Verifly. The insurance company that offers the policies for Verifly, Global Aerospace, is a very reputable aviation insurance company that I have personally worked with for years. In the end, it is going to be a business decision made by each individual operator. Annual aviation insurance policies and Verifly both have their pros and cons.

    Thanks,

    Joe Ernster
    joe@bullockagency.com
     
  10. Joe Ernster

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    Phill2,

    I should have made this more clear, I am strictly speaking about commercial UAV insurance. That is the only area in which I have experience. I apologize.

    Thanks,

    Joe Ernster
     
  11. Joe Ernster

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    Can I get a UAV insurance policy that covers me while I am outside of the USA?

    Yes. Before you buy a UAV insurance policy, make sure that you review the "Policy Territory" section with care. Each company has their own covered territory. Some are more broad than others. Be sure to let your broker know that you need to be covered in a specific territory. Also, Mexico and Canada have been known to have some very serious aviation insurance regulations. So, like anything else in life, do as much research on local regulations before flying in unfamiliar regions or countries. We have seen more than one aircraft be "nationalized" by the Mexican Government.

    Thanks,

    Joe Ernster
    Bullock Agency, Inc.
    joe@bullockagency.com
     
  12. BigAl07

    BigAl07 Moderator
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    Joe,

    can an existing policy through Bullock be amended for a short time period? For instance if I need to do a project for a month that requires $1M instead of the standard $500K.
     
  13. Joe Ernster

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    BigAl,

    Yes sir. Coverage can be modified at anytime. However, the insurance company frowns upon increasing and immediately decreasing coverage. This sort of thing creates mountains of paperwork for them. But if we only do it once or twice per policy period, we will be OK.

    Thanks,

    Joe Ernster
    joe@bullockagency.com
     
  14. Joe Ernster

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    What is "Medical Payments" coverage on my UAV insurance policy?

    Some aviation insurance companies offer "Medical Payments" coverage on UAV insurance policies. This coverage is often in the amount of $1,000, $3,000, or $5,000. At Bullock Agency, Inc. we like to call this coverage "go away money." If you were to "slightly" injure someone with you UAV, and they only required a small amount of medical attention, the insurance company would pay out your "Medical Payments" limit to them in order to rectify the situation. If their injuries exceed the "Medical Payments" limit, the payout would then tap into the "Bodily Injury" liability limits of your policy (generally $500K, $1M, $2M, $5M, etc.).

    Thanks,

    Joe Ernster
    Bullock Agency, Inc.
    joe@bullockagency.com
     
  15. rdandy5875

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    Great thread. Thanks for answering all the questions and clearing things up for us!!!
     
  16. Joe Ernster

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    rdandy,

    It is truly my pleasure. Aviation insurance is completely different than 99% of all other types of insurance. I think it is more honest which really helps me sleep at night. Prime example, if you totaled your car today, do you know how much the insurance company would pay you? Nobody does! In aviation insurance, they will pay you the agreed value of your aircraft minus any deductibles. It is a great business.

    Stay tuned! There is much more to come!

    Thanks,

    Joe Ernster
    Bullock Agency, Inc.
    joe@bullockagency.com
     
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  17. Phill2

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    No prob Joe
    I was just explaining my insurance co policy
     
  18. Jeiel Shamblee

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    I have liability coverage for commercial photography that doesn't exclude my drones. Only $350 / year for 1 million coverage. I should say that I primarily do ground based photography and my income from photography is only 1/2 of my income at the moment. Aerial photos and video are only about 5-10% of the work I do. I just made sure I read the fine print and my "flying cameras" Aren't excluded from the policy.
     
  19. turbulence

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    Can you share what company this is?
     
  20. Jeiel Shamblee

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    Hiscox