A quick guide to determine whether you’re adequately protected:
General liability insurance policies cover your liability to third parties for bodily injury or property damage that you or your employees cause. However, general liability policies contain the standard exclusion for “unmanned aircraft.” If you’re in the drone business, your GL policy will usually exclude all coverage for products. This means that a standard GL policy will only cover your office exposures, such as someone coming in for a meeting and injuring themselves in your boardroom. Keep in mind that: general liability insurance is different from aviation liability insurance.
Property insurance covers your own property. The property can be of two types: real property, like a building; or so-called “personal” property, which is anything you might keep in your office. If your firm owns its offices, it needs both kinds of property coverage. If you are a tenant, some business personal property should suffice. Business personal property can include your phones, PCs, desks and chairs, as well as equipment and tools.
Ensure that your property insurance policy covers your property wherever it is. Many small business policies only cover business personal property on the premises of the main insured location (i.e., only at your office). If you are traveling around with tools or equipment, you must tell your broker — in this case, you might need an “inland marine” policy to cover items that move around.
Commercial auto insurance can be purchased to cover two types of vehicles: corporate-owned vehicles and non-owned and/or hired vehicles. If your employees commonly rent vehicles when traveling on sales calls, you should consider buying this coverage. While it is primarily coverage for liability to third parties, you can also purchase insurance covering the vehicle itself (comprehensive and collision coverage). You do not want to rely on your employees’ insurance coverage.
Workers’ compensation insurance is a must; however, laws vary by state. Ensure you have the proper coverage in place. If you don’t, you may face potential civil — and even criminal — penalties.
Flight insurance is where the UAV industry deviates sharply from other industries. Drones are treated like jet planes and helicopters, so drone insurance coverage is offered by the few traditional insurance companies who insure aviation. You won’t find this insurance in your typical business market. Drone pilots should purchase flight insurance to cover their liabilities any time a drone is flown. They should also consider physical property damage coverage for the drones themselves (often referred to as “hull” coverage). Fortunately, the aviation insurance markets have responded to the rise of drones, and a cottage industry of hourly insurance carriers have popped up to fill this growing demand. Aldgate can find you an annual policy so that you don’t have to worry about buying insurance for each flight.
Product liability insurance protects you from third parties who claim your product caused them bodily injury or property damage. All manufacturers of physical products should purchase coverage for liabilities arising from their products. Few insurance companies offer coverage for UAVs as products. Like flight insurance, you must purchase coverage for your UAV products through the aviation insurance marketplace.
Errors and omissions (E&O) insurance provides coverage for your professional work product against claims of mistake or negligence. If your firm works in a consulting or advising capacity, consider protecting yourself with E&O insurance.
Intellectual property (IP) insurance protects your innovations and designs against claims of infringement. The UAV industry’s value is the IP contained in the minds of the employees and the files of the firm. You can insure your firm’s patents, copyrights and trademarks from theft by other parties. You can also protect your firm from other companies or individuals who allege you have infringed on their intellectual property. This type of insurance can mean the difference between life or death for a start-up company. IP insurance often adds value to a small company during an acquisition by a larger firm.
There are many other insurance products that can protect firms. Aldgate can help you navigate these coverages and help you decide which products fit your company’s circumstances, requirements and lifecycle.
Schedule a free consultation to learn more about how we can assist you.