What is a drone?
The FAA has defined what is commonly called a drone an “unmanned aircraft”. The definition includes all the necessary equipment to operate it (e.g., control station, data links telemetry, communication and navigation equipment). Drones come in all sizes and shapes. They can range from the palm-sized hobbyist versions to manned aircraft-sized major military aircraft. Hobbyist versions have simple remote controls operated via a smartphone and tablet. Complex drones, which can be pre-programmed and loaded with the most updated GPS, can operate unmanned for miles at a time.
Recreational drone use
Recreational drone use is on the rise. Right now, the smaller drones are recreational and are not part of the current FAA regulatory discussions. The use of drones is expected to rise substantially within the next 10 years as many different people, businesses and industries find a way to use these new aerial tools. Visit knowbeforeyoufly.org for more information about drones and air-space related issues.
Following are a few of the legal issues related to the use of drones:
- Can a property owner allege that a drone is “intruding” or trespassing on his or her property?
- How will nuisance, aggravation and other laws controlling felonious deeds be useful to the use of drones?
- Do territory restrictions apply to drones?
- What about confidentiality and cyberliability for the data that is being captured and stored?
- How will federal aviation law work in conjunction with state laws on some of these issues?
In addition to the regulatory and legal matters, many liability, risk management and insurance coverage issues will need to be addressed for both personal insurance and business insurance.
How a drone is used will determine the insurance coverage needed. For example, if a hobbyist drone with a camera takes photos for the operator’s own benefit, then it’s considered personal use. However, if the individual sells a photo taken by the drone, the operator may have a commercial liability. It is important to understand that there is a different insurance policy for recreational or commercial drone usage.
Drones can crash due to faulty and inappropriate operation, mechanical defects and/or drone component failure. Losses and damages could involve bodily injury to people, property damage to buildings and other structures and damage to the drone itself. There are also concerns such as personal injury and invasion of privacy, fraud surveillance and gathering of information, to the more traditional bodily injury and property damage exposures.
What types of insurance do drones need? The obvious one is physical damage to the drone itself and liability if the drone should injure someone or damage something. You also should consider personal injury and privacy intrusion protection. If you are using the drone for strict commercial activity consider aviation commercial general liability; aviation products liability; and non-owned aviation liability.
With an expected 32 percent increase in future sales of drones between 2015 and 2020, understanding the risks of drone use is important for the consumer and business person. Since there are many insurance implications involved, it is imperative that you tell your agent when you have purchased or have become the new owners of a drone.