What’s the Deal with Drones?
Article written by: Matthew Snowden, Minard-Ames Insurance Services LLC
Many contractors are asking “What’s the deal with drones?” If what they mean is: “What’s the risk of taking photos of a job with a drone?” then there is no single way to answer their question. Some follow-up questions like these may be helpful:
- Who owns the drone: the company, a third party, or you personally?
- Who is operating it and under what supervision/authority?
- Who has control of the device away from the jobsite?
- What information can the device capture and where is that information stored?
- Does your insurance policy consider the drone an aircraft?
- How will insurance respond in the event someone claims an invasion of privacy due to a drone?
- Most importantly: What concerns are causing you to ask this question?
There is no short answer. I have a successful client who imports and sells them, which gives me the opportunity to work through various risk management scenarios and fly one myself. Many fly high enough to easily crash into a plane leaving Sky Harbor. They could disappear in the bright daytime sky. They’re chalk full of fun controls and displays that may distract an operator. Batteries could die resulting in drones falling out of the sky. The list of “what ifs” is long and potentially entertaining. On the other hand, drones have many productive commercial applications that we’ll see with increasing regularity as issues like these are addressed:
- Legal issues: Is the use of a drone legal in any particular scenario and what risks are being assumed?
- Privacy issues: Does the operator have permission to capture images of everything within lens-shot?
- Safety issues: What happens if this thing flies into someone or falls out of the sky?
- Insurance issues: What is protected, what should be protected, what can be protected, and at what cost?
If you are considering jumping into the game, don’t assume you have insurance coverage or that it’s legal. It’s imperative that you consult with your attorney and your insurance agent about your plans. From an insurance perspective, it’s worth seeking advice on coverage that expressly addresses drone-related activities including but not limited to injury to third parties, damage to the drone as well as to third party property, invasion of privacy and data security issues.
The insurance industry is just beginning to try and get a handle on all of the risks and liabilities associated with the use of drones, as they know they are not going away. This means that coverage will be slow in evolving and those first in the market, will be charging a lot (as we have seen).
If you have questions, please feel free to give Matthew Snowden a call at (602) 273-1625 or email him at firstname.lastname@example.org