Drone Liability Insurance
An Emerging Risk
The use of drones has been identified as an emerging trend within the real estate industry, and thus is a new risk to be managed. Liability for property damage or bodily injury arising out of the use, or operation of drone aircraft can and will be imposed by law on licensed industry members, REALTORS®, brokerage firms and associations. The standard Commercial General Liability policy does not include, nor is it intended to insure the use, or operation of drone aircraft in connection with REALTOR®, brokerage, or association services. Insurance policies must be put in place to ensure that the commercial usage of drones is properly insured. No matter which party, there is an exposure and a separate policy would be required to cover the exposure.
Managing UAV/Drone Risk
The type of policy you need is dependent upon whether you are an owner operator of a drone (REALTORS®), or if you are hiring out drone work to a third party (Brokerages) or if you could be held responsible, named, or held liable for someone else operating a drone or someone else hiring one out (Brokerage/Association).
Brokerages, Associations, and Agents are often blamed and can be held liable for all kinds of mishaps, even if they have no fault or merit:
- Invasion of privacy
- Bodily Injury or Death to third parties
- Damage to a listing
- Damage to third party property
- Complaints made by the public
- Collision with a third party object, such as an animal, vehicle, or air plane
- Cyber risk whereby a third party takes control of the UAV and causes loss or damage
- Loss of control due to battery life, or natural causes such as: wind, rain or snow
*** These scenarios are not covered by REIX, nor an industry standard Commercial General Liability policy.
What is a Non-Owned UAV Liability Policy?
A type of aviation insurance for businesses and individuals that hire Third Parties for UAV (Drone) photography/videography.
Who is Protected?
- The Brokerage,
- Associate brokers or real estate agents (including any un-licensed assistants or real estate professional corporations), contracted to the brokerage, and
- Any of the above can be covered as long as they are not operating a UAV and have no financial interest in a UAV
What is UAV Liability and/or UAV Commercial General Liability (CGL) ?
A type of aviation insurance for businesses and individuals that own (have a financial interest in the UAV/Drone) and operate UAV’s for business purposes.
Who is Protected?
The individual or business entity that owns and/or operates the UAV.
***There must be a financial interest in the UAV to obtain insurance.
What is the difference between a UAV Liability policy and a UAV Commercial General Liability Policy?
The UAV Liability policy will respond to “bodily injury and/or property damage CAUSED BY the UAV”, where the UAV CGL policy will respond to “bodily injury and/or property damage arising out of the OPERATION of the UAV”. The UAV CGL and UAV Liability policy are both recommended in Urban flying operations. By itself, the UAV Liability policy is prevalent in rural operations, as the exposure isn’t as large. (Disclaimer: UAV CGL exposure could exist in rural operations; we are not saying it doesn’t exist). We look to fill the gap between the industry standard CGL and an Aviation UAV Liability policy.
UAV CGL Example
If the operator is negligent during setup or as a result of a UAV activity:
- During setup to fly the operator puts down a sign and someone trips over it.
- The UAV is taken out of a vehicle and while not airborne it scratches a vehicle beside it while being unloaded.
- UAV is being cleaned or maintained and causes resultant damage to third party property, or while attaching a wire there is a spark and it catches fire to something nearby.
***In summary, without a UAV CGL, you would not have coverage for these types of scenarios.