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Commercial drones may warrant various types of insurance coverage

Q&A with Michael F. Smith

published in The Oklahoman | January 5, 2017

While sales of unmanned aerial vehicles – also known as UAVs or drones – are on the rise, the vast majority are not insured. In a Q&A with The Oklahoman, trial lawyer Michael F. Smith explained why most businesses and individuals who use drones for commercial purposes need insurance to protect themselves from liability for bodily injury, property damage, or other claims arising out of the use or operation of the aircraft.

He warned that typical commercial general liability (CGL) insurance policies exclude coverage for liability arising out of the ownership, maintenance or operation of aircraft, which includes drones.

“We will likely see lawsuits involving privacy rights arising out of the use of drones,” said Smith. “Thus, any one who uses commercially a drone should verify that they have insurance that covers liability for bodily injury, property damage, and other claims arising out of the use of drones. Additionally, depending on how much you paid for your drone (small drones can be purchased for less $100 and some larger commercial drones can cost in excess of $300,000), you should consider insurance coverage that will repair or replace the drone in the event it is damaged or destroyed in a crash.”

Businesses that hire contractors to use drones not only need to make sure the contractor has proper insurance, but that the coverage is extended to the business as an additional named insured, said Smith. “You also should verify that your agreement with the contractor has an indemnification provision, which requires the contractor to defend and indemnity you in the event the contractor’s drone operator causes bodily injury or property damage.”