US home insurers urged to clarify liability cover for drones

Tuesday, April 19, 2016 - 10:26

Home insurers in the US have been urged to clarify their policy wordings in respect of the cover they are providing for liability arising from drone usage.
James Van Meter, aviation practice leader at Allianz Global Corporate & Specialty (AGCS), said homeowners’ policies often had ambiguous exclusions for “hobby” aircraft. But was not clear whether drones fell within these exclusions.
Van Meter gave the example of one policy wording that excluded liability for aircraft. It defined aircraft as any aircraft that is “not a hobby-type” craft. But hobby-type craft was not defined.
“The definitions are ambiguous. It is not clear if a drone would be covered,” he said.
In the UK, home insurance policies generally exclude liability arising from drone usage.
His comments come amid growing concern about the threat posed by drones to aircraft.
A British Airways flight was struck by what is believed to be a drone as it came in to land at Heathrow airport on Sunday.
The incident is the latest in a series of similar incidents involving drones in UK airspace, leading British pilots to call for tougher regulation. An air safety report found four serious near-misses involved drones and aircraft last year.
Van Meter said users of hobby drones raised the greatest concerns in relation to aviation safety, as operators are likely to be less well-trained than commercial users.
“There has been a strong up-tick in the pattern of sightings and near misses,” he said.
The number of drones is predicted to explode in the coming years.
An estimated seven million drones will fly in US skies by 2020, nearly tripling the number expected to be in circulation by the end of the year, according to the Federal Aviation Administration (FAA).
Hobby drone numbers are expected to climb from 1.9 million in 2016 to 4.3 million in 2020, while commercial drones are predicted to soar from 600,000 to 2.7 million.
The FAA has forecast that some 2.5 million drones will be in use in the US by the end of 2016.
The potential safety issues arising from drones – particularly the risk of collision with other aircraft – are the greatest concern for government authorities.
The FAA will publish final regulations regarding drone use within the next few months.
In March of this year the Civil Aviation Authority (CAA) published a 165-page booklet on the regulation of drones. The CAA’s general policy is that unmanned commercial flights have to meet at least the same standards as manned commercial flights. Drones weighing more than 20 kg require registration.
Insurers are keen to take advantage of the predicted surge in numbers of drones.
Aviation insurers such as AGCS write commercial drone policies.
Insurance Day reported in November that Ark Specialty Programmes is leading the first Lloyd’s-backed unmanned aerial vehicles (UAV) binder product in the US.
Some commentators project a global market of $90bn for drone-related businesses by 2022.
In the UK adequate insurance is required to cover potential damages, injuries, or losses resulting from recreational or commercial drone operation.
The risks include such things as potential injuries to persons or property, and legal violations arising from nuisances such as noise, proximity, privacy or trespass.
Author: Michael Faulkner, Editor
Published Date: 06:11, 18 April 2016