As more individuals and corporations use drones for fun and profit, there will be more drone-related claims.This explosion of drone use brings with it new liability exposures and insurance coverage issues.
The first question after an incident is going to be whether there is an applicable policy. As a general rule, commercial drone operations are covered only by specially written policies, not by general liability policies.
Personal use is less clear. Some homeowners’ policies or personal umbrella policies may cover hobby use, while others will exclude coverage such use as constituting aircraft operations.
If your business relies on a contractor to provide drones services you should use caution, it may not relieve you of your liability exposure. Even when there is an applicable policy, if the contracted pilot is using the drone in violation of law, the claim will likely not be covered. Unlawful use exposes companies and employees to civil and criminal liability, including fines and adverse court awards or high settlements.
In the event of an accident, any potential claimant will seek relief from both your insurance company and the contracted pilot. If the contractor was operating unlawfully, its insurance carrier is unlikely to defend the claim. If the contracting person or business insurance company was willfully blind to this violation, it may find itself in the position of the only “deep-pocket” defendant trying to explain its actions.
So, how do you protect yourself? Prior to contracting with a pilot, I suggest at a minimum you should insist on some verification of insurance, experience, knowledge of applicable laws and regulations, and a plan for complying with those requirements.
You may also want to draft a services contract that incorporates these elements and, perhaps, adds additional elements such as procedures to ensure that the flights do not commit trespass, do not violate personal privacy rights and do not endanger the public. That the pilot is being a “good-neighbor” by coordinating with adjacent property owners or providing advanced notice of flights.