It’s a bird. It’s a plane. No – it’s a drone.
...Or Unmanned Aerial Vehicle (UAV)
According to the Association of Unmanned Vehicle Systems International, drones are used to enhance public safety, support agriculture, help the environment, monitor the climate and mitigate disasters (and don’t forget its new use – delivering your Amazon packages). Currently, the FAA has allocated $63.4 billion for the modernization of the country’s air traffic control systems, as well as an expansion of airspace to accommodate the commercial use of drones.
The construction industry is slowly – but surely – jumping on the bandwagon, as these devices provide a way to obtain real-time data on job progress, identify potential hazards or quality issues and help acquire other useful information in a quick, cost-effective manner.
But with this newer technology, comes complex challenges – specifically as it relates to insurance. A recent Risk & Insurance article touched upon some of these issues:
Carriers are currently in the process of developing policies to cover insurance exposures presented by these small unmanned aircrafts, yet there’s little clarity or guidance in this area. Even with the current lack of UAV insurance “experts” or private UAV claims, it’s clear that two particular issues are going to raise huge red flags to the insurance industry — personal injury and invasion of privacy. In addition, with the ability to collect massive amounts of unsolicited data, UAVs present an enormous threat to individual privacy and a significant challenge for insurance carriers.
As of right now, there have been limited incidents; however, you’re shooting a remote control device in the air and only a limited number of people know how to operate it. Therefore, it’s only a matter of time before we start seeing problems for construction owners.
If there was an incident, most insurance carriers are not covering it right now. Some carriers are using separate policies, but frankly, a lot of them don’t know what to do yet. There has been talk of an ISO form at the end of the year, but most carriers don’t know how to charge for the coverage since drones can be looked at as an aircraft, which is excluded. As of right now, there’s no clear indication as to whether drones will be included in most property policies. And with the average deductible on inland marine coverage being $1,000, our guess is that drones will likely be self-insured.
If your construction company is considering or currently using drones, follow these steps:
- Get an understanding of where you may or may not be covered in terms of personal liability, personal injury, property damage and invasion of privacy.
- Weigh the potential savings of using a drone versus your liability; costs for drones can vary between $800-$2,000.
- Make sure your insurance broker and carrier are aware of the intended use, takeoff and landing location, flying altitude and whether it’ll be operated over a populated area.
- Ensure the person operating the drone is properly trained and abides by all the manufacturer’s safety policies.
For More Information:
Contact Jim Naylor (firstname.lastname@example.org; 847.463.7208)
or watch our webinar replay on drone regulations
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