Munich Reinsurance America, Inc. (Munich Re, US), announced the launch of a new commercial drone insurance endorsement last week, highlighting the impact of Federal Aviation Agency Rule 107, opening the skies to small and medium-sized businesses.
FAA Rule 107 went into effect in August 2016, allowing drone flights in U.S. airspace for by non-recreational operators who completes a certification process.
The FAA anticipates that 2.7 million commercial drones could be in use by the year 2020.
Tim Brockett, Senior Vice President, Reinsurance Division Strategic Products, Munich Re, US, noted interest in commercial use of drones from a broad spectrum of industries, including photography, security, firefighting and law enforcement. “But as companies and public entities find new, safe and cost-effective ways to use drone technology, most commercial insurance policies don’t cover or offer very limited liability protection for drones,” Brockett said in a media statement, indicating that the new endorsement “addresses an emerging market need” and offers a customized insurance solution to help protect companies against potential liability resulting from drone use.
- The Munich Re, US Drone Liability Endorsement can be attached to an existing commercial general liability insurance policy purchased through a participating insurance carrier.
- The endorsement provides bodily injury and property damage liability or personal injury liability coverage for drones that are under 55 pounds.
- It is designed for small-to-medium sized businesses and farm and agricultural operations in the U.S. that utilize drones to support other sources of revenue.
- The Drone Liability Endorsement can be customized based on insurance carriers’ existing commercial lines policies and their policyholders’ needs.
- Claims are handled by the insurance carrier.
“Ease of use is also a key deliverable of this new offering,” Brockett said. “Insurance carriers that offer the Drone Liability Endorsement to their commercial policyholders will have access to an Application Programming Interface (API) that will seamlessly verify that the drone and drone pilot have active and valid registrations with the FAA.”
Source: Munich Re, US