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New regulatory and insurance issues affecting drone owners

Post written by Mike Vettel

shutterstock_245487850Suddenly, everyone has a drone — or at least it seems that way. An estimated one million unmanned aircraft will be sold for the holidays this year alone. And while many will be used for personal entertainment, drones are also being used for commercial purposes including mapmaking, emergency response, aerial photography, crop management and real estate appraisal and surveying.

The U.S. Transportation Department (DOT) and Federal Aviation Administration have long struggled to establish guidelines for drone technology as it continues to evolve, especially in light of privacy, safety and crowded airspace concerns. What does the future hold for drone owners regarding regulations and insurance coverage? Here are some changes that lie ahead.

Required registration by drone owners

One of the first steps government agencies are taking to oversee drone usage is to require owners to register the device with the DOT. More details about compulsory registration for drones are available on the FAA website and owners may now register through a web-based system at

But there are many questions that still need to be resolved. Will all drones be subject to registration, or only commercial-grade technology? What will the registration process consist of? Can it be done online? Does the ruling apply only to newly purchased drones, or to those already in service? As the regulatory environment heats up, drone owners and buyers can expect more definition around changing regulatory requirements and what they must do to stay compliant.

Broader insurance coverage options

The insurance industry is also moving to get behind drone technology. The existing Insurance Services Office (ISO) Commercial General Liability Coverage form calls drones “unmanned aerial vehicles,” or aircraft, and excludes coverage for bodily injury and property damage resulting from the “ownership, maintenance, use or entrustment to others” of drones. However, the offerings of insurance providers are likely to evolve as the use of drones by consumers and businesses increases.

There are a wide range of industry groups that now use drone technology, including agriculture, construction, golf course management, real estate, restaurant/retail delivery services and others. To help protect customers, carriers are introducing coverages that offer underwriting flexibility for drone owners. These options will allow carriers to better support individuals and businesses that benefit from exploring drone technology in their industries.

If you buy a drone — whether for business or as a gift for your favorite hobbyist — always be aware of the accompanying insurance risks. Westfield Insurance is in the process of monitoring the regulatory environment and available coverages being offered by ISO.

For more information about the risks and regulations associated with drones, contact your local independent insurance agent. For a list of independent insurance agents, click here.

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