1. 1
ABA Forum on the Construction Industry
Division Lunch Program
UAS – Risk Management and Insurance
Anatoly M. Darov, P.E.
October 8, 2015

2. Drones/Unmanned Aerial Systems
risk exposures
Third party property damage and personal injury
PIC/VO injury
Loss of aircraft (aircraft hull)
Insurance coverage solutions are evolving in this area
No insurance requirements mandated by the FAA
Liability only policies applicable to the UAS or an endorsement to
CGL coverage; aircraft liability form policies also available
Owner vs. non-owner policies
2

3. Drones/Unmanned Aerial Systems
CGL, commericial property/inland marine policies generally
exclude aircraft liability
UAV configuration, operator experience and intended are key
factors that will drive premium rates
Hobby/recreational use will invoke homeowner’s policy which
generally exclude PD/PI arising out of aircraft owned, operated,
or loaned to you.
An insurer bears the burden of establishing that an exclusion
applies.
Some policies difine “aircraft” but others may not
FMHO943 (ed. 11-96) exempts model or hobby aircraft not used
or designed to carry people or cargo-burden shifts to insured to 3

4. Drones/Unmanned Aerial Systems
Risk management options
Negotiate an exception to the aircraft liability exclusion in your
CGL
Obtain an endorsement for UAV liability coverage on your CGL
Purchase a UAV specific policy to cover all risk exposures
Most comprehensive – includes transit coverage
Retain a properly insured and licensed vendor
Third party property damage and personal injury
PIC/VO injury
Loss of aircraft (aircraft hull)
Insurance coverage solutions are evolving in this area
No insurance requirements mandated by the FAA 4

5. Drones/Unmanned Aerial Systems
Carefully review coverage terms and conditions
Review limitations on size/weight—very small UASs (< 5 lbs)
Is coverage for the aircraft itself provided or excluded?
Exclusions for equipment malfunction or defect?
Risk Management Considerations
– Develop SOPs for UAS deployment consistent with terms of Section
333 Exemption
– Develop SOPs for pilot training and vehicle maintenance
– Restrict home hobbyist use and development “outside the office”
– Review insurance coverage options frequently with your brokers
because of rapid innovation of insurance solutions and evolving
regulatory requirements—new products will be offered
– Review insurance policies and insurance coverage for any outside 5