Drone Insurance

When I was at the test flight last week, I overheard a conversation about the strong opinions hawks have toward UAS.  It isn’t favorable either, as shown in this video that has gone viral:

I had been thinking about the topic of drone insurance for some time – it was inevitable since I am a lawyer and my wife is a specialized insurance broker.  The issue came up again when, of all people, an FAA representative asked me about the insurance aspects of UAS.

I have asked my wife, Kristen Lincoln, to provide some insight and advise regarding this topic.  She is at Gowrie Group in Westbrook, CT, but works with clients all over the country and you can email her here: Kristenl@gowrie.com.  (Updated July 2015:  We have moved due to my recall orders, so please email Kristen at Kristen.E.Lincoln@gmail.com).

An Introduction to Insurance for UAS – by Kristen Lincoln

One must consider a number of legal issues surrounding the use of UAS while reviewing and deciding upon insurance coverage. This should not be taken as legal advice – you should contact an attorney if you have legal questions and discuss your specific situation.

  • Damage to your system.  This brings up a number of issues such as:
    • Damage to the aircraft itself.  This is normally covered by a “hull policy.”  Your general policy is not necessarily going to cover damage to the aircraft, particularly while in flight.
    • Damage while in transit or while in storage.
    • Hacking.  This requires a cyber insurance policy.  Recall the recent post about Maldrone?  It was also a hot topic at the recent House hearing and industry representatives acknowledged that UAS can be hacked, just like any other system; whether to usurp the drone or to steal its data.
  • Trespass.  Before the Wright brothers introduced us to manned flight, a landowner owned the air up to heaven (“Cujus est solum, ejus est usque ad cœlum” – “He who owns the land, owns everything up to the heavens.”).  It took decades to figure out how the rule should apply to manned flight, and it is going to take time to to figure out how it applies to UAS.  In the meantime, keep up on the rules and protect yourself should someone try to sue you.
  • Invasion of Privacy.  The rules vary by state, and individuals within a given state might have a different view as well.  It doesn’t mean they’ll win if they sue you, but it means you are on the hook to defend yourself – unless you have insurance that provides for an attorney in the given situation.  California has strict anti-paparazzi law and Tennessee passed a UAS-specific law, but in New York it is generally hard to be liable for invasion of privacy. Also, recall the issue in Hammonnassett?  While this was clearly not an invasion of privacy issue, it still poses concerns.
  • General Negligence.  This covers general negligent acts and is frequently used as a legal catch-all.  Duty…Breach…Causation…Harm.
  • Professional Liability.  Are you using this commercially (FAA concerns aside)?  Keep this in mind as well to protect your professional assets.
  • Products Liability.  This is an important concern for makers or sellers of UAS.

This is just the tip of the iceberg and any insurance coverage must be tailored to the specific situation.  If your broker isn’t asking you specific details – who is flying, what you’re flying, their experience and training, maintenance, and the flight plans – you should get a second opinion.  Hopefully I’ve piqued the curiosity of UAS users and developers out there.  Please feel free to reach out to me if you have any questions.

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