Tips on Drone Insurance

Why UAV Insurance?

Almost everything is insured. Our life, our houses, our vehicles and many more things which we value. The increase in drones, especially among the civilians has given the need to add drones in the list of insured items. If you are conducting business and earning money using drones, it is a wise idea to get your drone(s) insured. Even if you are not earning money and plan to earn in the future, even then it is a good idea to get insured. This will help you prevent paying out of pocket in the event an accident occurs.

Getting drones insured would also be good for your business. Your clients would feel secure and would want to do business with you. This would retain your clients as well as help in bringing new clients.

We all know that the applications of drone use have increased vastly from it’s original military use. Now, people are using drones for commercial use as well as individual purposes. In the near future, you will frequently see drones flying above you. With the increase in the number of drones, accidents are bound to happen. They could crash in a building, in another drone or worse, in a plane. Even now, pilots have reported about 25 near misses with drones. If this is the rate now, imagine what future rates will be?

Moreover, with the stealth nature of drones, many people might get offended when your drone hovers above their house or their office. They could then slap a lawsuit of invasion of privacy. The American Civil Liberties Union has even asked for rules concerning drone use to prevent the society into becoming a ‘surveillance society’. If this is the level of concern now, imagine what it will be in the future.

Types of UAV Insurance:

As of now, if you are not a commercial drone user, homeowner insurance would suffice. The catch is, however, that the drone must be flown over your own property and/or away from the public.

If you are a commercial user of drones, no matter how big your operations are, you will need to get your UAVs insured.

The amount of insurance depends on the use and the country in which it is being insured.

Drone Insurance:

Getting drone insurance is not that easy. You have to prove that you are serious about drone use. You have to prove that you have some sort of expertise in drone flying. This could include copies of operating manuals, records of sale and purchase of drones and drone parts and also proof of training.

Insurance Operations:

The majority of the insurance companies insure drones for the following operations only:

· Agriculture

· Archaeology

· Construction

· Emergency response

· Environment evaluation and monitoring

· Knowledge and information gathering

· Law enforcement

· Movies and documentaries

· Security

· Shipping and maritime

· Sites protection and surveillance

· Traffic patrol and assistance

· Transportation maintenance

Type of accidents covered:

Following are the accidents covered currently with various UAV insurance plans:

· Loss of drone

· Partial or complete damage of drone

· War

· Hijacking

· Terrorism

· Personal injury

· Fire

Cost of Insurance:

Drone insurance is basically split in two parts: liability and hull damage. In the liability type, these are the damages claimed by the third parties whereas hull damage is the damage related to your own drone. Generally, insurance policy for a liability goes up to $ 1 million while for hull damage it can go to $1500 per year. These are general quotes and specific ones may vary from company to company and drone to drone. Some companies provide insurance for liability only while other for hull damage and some for both.

Requirements of Insurance Brokers:

Insurance brokers also have some requirements. Generally, they would need the number of flying hours of the drone. The flying hours should normally be between 50 and 100. The drone owners are also required, in some cases, to hold the FAA 333 exemption. FAA 333 Exemption is a certificate issued by the Secretary of Transportation to operate in the National Airspace System. The insurance brokers also want to know whether the drone is owned or leased. They are curious as to whether the drone is able to automatically store the flight data etc. Lastly, they want to know the areas the drone has been flying and will fly in the future. They also check the website and last but not the least, want to know if any sort of training or certifications have been taken vis-à-vis drones.

Getting Insured:

When getting insured, first decide which company you want to go with. For that, you have to get quotes from several companies. And to get a quote from a company, you need to go to their website and fill out the quote form. The form will ask several questions related to the information about the owner, the type of coverage and the cost of equipment, operational locations and number of hours flown, training levels and number of previous accidents etc. After the form is filled, the particular company replies back with the quote. Once you have several quotes from several companies, you are better able to judge and you can apply to the company of your choice.

Insurance Companies:

Following is the list of some insurance companies who deal with drones. The list does not include all of the companies and might not include the best ones, but they are sufficient:

· Aerial Park

· AIG

· Avion Insurance

· Avalon Risk Management

· Coverdrone

· Driessen Assuadeuren

· Harpenau Insurance Agency

· Sky Smith

· Sutton James Incorporated

· Unmanned Risk Management

So, this was a modest effort to inform you about how to go about getting your drone insured. In recap, those who want to just fly over their homes or clear of public and for recreational purposes do not need to get any type of drone insurance, as homeowner insurance will be sufficient. Those using UAVs for commercial purposes really need to get their drones insured and should consider getting their drones insured right now. Who knows with the passage of times maybe the laws pertaining to drone insurance will get much clearer and conformed across the insurance industry.

General Liability Insurance For Contractors – 4 Tips to Avoid Coverage Surprises

General liability insurance is one of the first types of policies you will need if you are starting a new business. At Clinard Insurance we are seeing many new small business startups.  Starting your own company is popular these days with the layoffs we are seeing in our economy. The best choice is often to pursue something that you love doing and so we are seeing lots of people starting new businesses around their building skills. But just because you love to build things doesn’t mean you know the best way to protect yourself and your company from lawsuits.

Here are some tips for pitfalls that you should avoid when buying general liability insurance.

 

Choosing the right agent. The first place people generally go for their business insurance is the insurance agency that handles their home and auto insurance. In some cases this will work out well. But the risk is that your current agent may be licensed to sell you general liability insurance on your new company while really possessing very little experience in evaluating the hazards and risks of your specific type of company. I would suggest that you go out there and look for an agent that specializes in insuring other small businesses like yours. Ask your competitors who they used. At Clinard Insurance we have a niche specialty in small contractors and we speak their language and understand their needs. If your agent doesn’t specialize in your business, I suggest you find one who does.

 

Claims Made or Occurrence Policy Type: Construction claims made policies became popular in the mid 1980’s and have been around ever since. The promise of these policies were lower rates, but at what long-term damage? In some instances there is no cost savings. Claims made polices for a contractor are the worst possible policy you can buy. Let me explain: Claims made policies allow you to make claim on your policy only during the year they are in force. Contractors have claims down the road, not always just in the same year as the project is built!  Also, if you want to leave that company and go to another company, you will have to purchase additional insurance to cover you for the next 10 years… that’s right, 10 years! Why? Because the law allows customers to file a lawsuit for construction problems for up to 10 years after the project was completed.

 

An Example:

You build a new room addition, everything goes well and you and your customer are very happy with the final outcome… 4 years later your customer calls you and says that the roof is leaking and water came in the house and ruined his new $25,000 grand piano. He expects you to repair the roof, the drywall, wallpaper, carpets and, of course, replace the grand piano….

A claims made policy will not allow you file a claim 4 years later unless you stayed with that same company the whole time. If you intend to change companies after you have had a claims made policy, you must make a decision. If you want to have protection for any claims that have not occurred yet, but will in the future, you will have to purchase “tail” coverage. This coverage will extend the time in which you can file a claim. And tail coverage is not cheap. 

If you decide not to buy the “tail” you will not be able to report a claim against the claims made policy. And to make matters worse, some companies do not offer the 10 year extension.

So…. When your claims made policy comes up for renewal, you must decide:

  • Do I leave the company and pay the additional insurance for coverage for the next 10 years, or go without protection.
  • Do I stay with the same company? Their prices on the new year may stay the same or go up sharply.
  • Do I switch to another company who has better rates and coverages?

This limits the marketplace available to you, and makes it harder to accept a better bid from another insurance company. Claims made policies may work in other industries, but for Contractors they are a disaster. Take time after reading this report to see if your current policy is either an occurrence form or a claims made form…..

 

Insurance Company Rating It is up to you to do the due diligence and ask your agent about the financial health of the company from whom you are buying your general liability insurance. As the previous tip implied, sometimes the claims may be very much delayed and you need to know that your company can pay a claim for you 10 years from now. Use only A rated or higher insurance companies to protect your business.

 

Exclusions, Understand Them Clearly   Be sure to take the time to ask your agent about the policy exclusions and what they may mean for you. Here are some exclusions that contractors should consider when purchasing a general liability insurance policy:

Pesticide, Herbicide and Fungicide Exclusion, Employment Practices Liability Exclusion, X.C.U exclusion, Contractors Warranty Exclusion, Professional Liability Exclusion, Asbestos, Independent Contractors. If you don’t know exactly what these mean for you on your policy, contact your agent and get the help you need to understand it clearly. This may change the way you run your business.

 

Subcontractors   Be sure that you understand just how your policy treats subcontractors. Are you covered if they have no insurance or not enough for the loss?  How much coverage should you require of your subcontractors? How often should you obtain certificates of insurance? How can you be sure that the certificate of insurance is legitimate. (I have seen fraudulent certs for sale on eBay before). If you are not clear about the answers to these questions vis-à-vis your business and your general liability policy, you should call your agent right away and get the answers you need to sleep well at night.

 

As you can see buying general liability insurance is not a simple as calling your agent and asking for a quote. You need an experienced professional that understands the policy forms and your business. At Clinard Insurance we specialize in helping small contractors navigate the dangerous waters of the insurance world. If we can help you further, or if you would like more information about Clinard Insurance Group, please visit our web site.