Insurance

[CraigCam]

We received this today from our business insurer. Apparently if I crash my drone onto my property, (or someone else does) we cannot file a claim. It seems the insurer is classifying my multi rotors as aircraft. So while congress and the FAA ignore dealing with clarifying our legal flight parameters, the Hartford is proactively regulating us by already opting out of potential liabilities from drone traffic overhead. Maybe they know that this is the future and the sky’s will be crowded.

I’ve attached the two notices. It seems the first is to clarify that the drone is a plane ( legal challenges anyone?) and wrap them into the policy.

Anyone else seen this?

 

[Eagle's Eye Video]

So do Hartford agents using UAVs to survey damage, have to insure with Jake from State Farm?

 

[PatR]

Most Homeowners policies list disclaimers for incidents/damages involving aircraft. For many carriers anything RC has been excluded for a long time. Farmers will not cover aircraft damage/liability of any kind unless you have a separate umbrella policy. The federal government and the FAA have defined any RC or multirotor as an aircraft so it's very easy to exclude them from coverage. You have the option of acquiring aircraft specific coverage for liability, hull, or both. Aviation insurance is a specialized field and handled by a limited number of carriers. It's not cheap at the multirotor level. It's actually cheaper to fully insure a manned private aircraft. Both my H's run a little over $600.00/year for $1 mil of liability only. Adding hull, theft, and individual component (payload, airframe, ground control station) ups the cost per aircraft considerably. The type and value of the aircraft impacts the policy price, and each aircraft has to be insured individually, listing serial numbers of aircraft, cameras, and controllers.

If you are operating commercially it's just part of the cost of doing business. It's part of the reason the "fly by night" quick buck operators working on the sly are causing tremendous damage to those that operate legally and responsibly. Most of them are not in any way insured and their fee structure reflects that, and other clues to their lack of professionalism. If you are operating commercially it behooves you to come up to speed with regards to insurance and other indirect business costs. many clients will demand a certificate of insurance naming them as "additional insured" before entering an agreement with you. Lack of awareness suggests you may not yet be ready to run a commercial aerial business and cause customers to say "thanks for your bid" and you'll never hear from them again.

For those that are not aware, before you apply for commercial aircraft coverage you'll need to get your operational documentation package in order with log books, maintenance practices, safety policies/procedures, training, both new and recurring, along with company SOP's. The insurance carriers want to review them before providing policy quotes. Some require a description of how you'll assure security for flight generated data.

 

[Ty Pilot]

I believe the FAA does classify all drones that are operating in the NAS for commercial use as Aircraft but I have not seen anywhere that they call them a Plane or Airplane, so you may have a point there but in the posted picture the insurer does say "Aircraft"

 

[CraigCam]

Most Homeowners policies list disclaimers for incidents/damages involving aircraft. For many carriers anything RC has been excluded for a long time. Farmers will not cover aircraft damage/liability of any kind unless you have a separate umbrella policy. The federal government and the FAA have defined any RC or multirotor as an aircraft so it's very easy to exclude them from coverage. You have the option of acquiring aircraft specific coverage for liability, hull, or both. Aviation insurance is a specialized field and handled by a limited number of carriers. It's not cheap at the multirotor level. It's actually cheaper to fully insure a manned private aircraft. Both my H's run a little over $600.00/year for $1 mil of liability only. Adding hull, theft, and individual component (payload, airframe, ground control station) ups the cost per aircraft considerably. The type and value of the aircraft impacts the policy price, and each aircraft has to be insured individually, listing serial numbers of aircraft, cameras, and controllers.

If you are operating commercially it's just part of the cost of doing business. It's part of the reason the "fly by night" quick buck operators working on the sly are causing tremendous damage to those that operate legally and responsibly. Most of them are not in any way insured and their fee structure reflects that, and other clues to their lack of professionalism. If you are operating commercially it behooves you to come up to speed with regards to insurance and other indirect business costs. many clients will demand a certificate of insurance naming them as "additional insured" before entering an agreement with you. Lack of awareness suggests you may not yet be ready to run a commercial aerial business and cause customers to say "thanks for your bid" and you'll never hear from them again.

For those that are not aware, before you apply for commercial aircraft coverage you'll need to get your operational documentation package in order with log books, maintenance practices, safety policies/procedures, training, both new and recurring, along with company SOP's. The insurance carriers want to review them before providing policy quotes.

This was sent to my business - a recording studio - and nothing to do with me as a pilot or someone who provides footage to friends privately and non commercially. It seems that they feel the need to add “drone” as my policy says aircraft and they don’t want me filing a claim when my amazon delivery has a problem. Your tangent, while appreciated, is not relevant to my question which is how many other businesses are getting this kind of clarification. It seems to me a shot across the bow at the idea of commercial drone delivery as they with a couple of paragraphs remove themselves from actually insuring my business against a particular form of transportation. I’m sure I never paid attention to the fact that a plane crashing into my building is not covered so it was interesting that with a few pages my policy is amended. So if a C130 from DM drops in my building I’m not covered (and most likely dead and done as a business) and since I’m done it’s a catastrophe so no payout. That’s pretty boilerplate insurance stuff but they are getting in front of property damage like roof repairs, and people getting hit. And if amazon does the legalese right, buried in the delivery info you click onto to except will be you acknowledging that they have no responsibility if a mishap occurs during delivery to you and no one will see or read it. Insurance companies are run by lawyers and their main job is to not pay out claims. The fact that they realize that “drone” and “UAS” are not specifically listed in our original policy purchased in 2013 and they need to clarify that is what I find interesting and that no option to purchase protection from this perceived threat is offered is telling.

 

[FlushVision]

My insurance for my commercial UAS business covers the whole kit and caboodle. All aspects of the systems (aircraft, controllers, batteries...everything, including computer and data). It also covers me against any litigation against me under privacy issues (Data Protection Act), acts of terrorism & war and, of course, the Public Liability. Completely comprehensive...The Full Monty.

Expensive, yes, but I have peace of mind, and it goes down well with my clients.

 

[PatR]

My post was not a tangent, but factual information for people to gain knowledge from. Whether used as a hobby or an occupation, the feds have established our drones are "aircraft", be that a plane or rotorcraft. That became a fact of life when Part 336 was put into law. We can either accept that many non commercial and common commercial policies exclude them or go on a rant in outrage, the fact is if your insurer does not cover losses involving aircraft you might want to look for a new carrier. It's probable they sent a similar letter to other businesses as company policy to inform their customers of changes/clarifications in policy limitations. It makes a bit of sense as so many are now flying "drones" any and everywhere. That incidents will be happening that induce insurance claims is a certainty. Your insurance company has made it clear they won't cover anything, regardless of who or what if an "aircraft" was involved.

Insurance companies are in business to make money (you know that already) and look for any way they can to make more and avoid spending any. You already know that, too. Car insurance is another neat little trick. if you have common personal auto insurance policies you might find they won't cover losses for anything that happens while the vehicle is being used for commercial purposes unless you have a commercial rider. They charge more for that.

Shifting directions for a moment, an interesting aspect about drones is that the people making the money from them are for the most part those selling products and services to those using them.

 

[CraigCam]

Thanks for the info. I’m not ranting or outraged. If I drop my drone on my roof that’s my problem obviously. I was just trying to point out how private sector as usual is ahead of government clarification. I know of events here done 100% legally only to have the local PD shut them down because they weren’t in the loop. There seems to be a lot of energy being put into prohibiting not helping and the whole confusion created by Hobby class aircraft being used commercially is still murky. Why would anyone bother to jump through all the hoops when the agencies still aren’t in unison? If I fly my 480 within established FAA guidelines with permission on private property for fun and personal use, then I’m still supposed to get a 107? If that’s the case then no camera drone should be sold without an FAA number and all the transfers of ownership and registration needed. As it stands now, my FAA number is joke due to the lawsuit that clarified we are not aircraft. So which is it? And I’m not ranting. My purpose is to openly discuss the murky side. I’m seriously considering a 520 and setting up as a commercial service as the city of Tucson is accepting drones as a viable tool. Of course I’m going to do it right. I’m not stealing work from any legit companies as it’s still a learning curve for me. I don’t charge anyone. All my flying this summer in the very restrictive state of CA was edited into a music video for my artist. Again, it’s for my enjoyment but I gave hours of footage to a good editor and now I’ve got a kick *** video that I contributed to. Did I break the law by doing this?

https://www.facebook.com/video.php?v=10159513663480381

 

[FlushVision]

Thanks for the info. I’m not ranting or outraged. If I drop my drone on my roof that’s my problem obviously. I was just trying to point out how private sector as usual is ahead of government clarification. I know of events here done 100% legally only to have the local PD shut them down because they weren’t in the loop. There seems to be a lot of energy being put into prohibiting not helping and the whole confusion created by Hobby class aircraft being used commercially is still murky. Why would anyone bother to jump through all the hoops when the agencies still aren’t in unison? If I fly my 480 within established FAA guidelines with permission on private property for fun and personal use, then I’m still supposed to get a 107? If that’s the case then no camera drone should be sold without an FAA number and all the transfers of ownership and registration needed. As it stands now, my FAA number is joke due to the lawsuit that clarified we are not aircraft. So which is it? And I’m not ranting. My purpose is to openly discuss the murky side. I’m seriously considering a 520 and setting up as a commercial service as the city of Tucson is accepting drones as a viable tool. Of course I’m going to do it right. I’m not stealing work from any legit companies as it’s still a learning curve for me. I don’t charge anyone. All my flying this summer in the very restrictive state of CA was edited into a music video for my artist. Again, it’s for my enjoyment but I gave hours of footage to a good editor and now I’ve got a kick *** video that I contributed to. Did I break the law by doing this?

https://www.facebook.com/video.php?v=10159513663480381

First off. Great video. I loved it. Nice tune too.

I can only speak with the knowledge of U.K. law as I understand it...coz that's where I live.

In the U.K. so long as you, yourself, are not getting any consideration for your work, either financially or otherwise, then there's no problem. If you give your footage to someone else and they make money out of it then still, no problem so long as it's not you that is getting consideration. It is only classed as commercial if you are personally benefiting from consideration.

One point, though. If you are giving footage away for free, then you must think what the person would do if you didn't give him/her your footage. Would they feel a need to pay a commercial operator to get the footage? Food for thought.

 

[CraigCam]

First off. Great video. I loved it. Nice tune too.

I can only speak with the knowledge of U.K. law as I understand it...coz that's where I live.

In the U.K. so long as you, yourself, are not getting any consideration for your work, either financially or otherwise, then there's no problem. If you give your footage to someone else and they make money out of it then still, no problem so long as it's not you that is getting consideration. It is only classed as commercial if you are personally benefiting from consideration.

One point, though. If you are giving footage away for free, then you must think what the person would do if you didn't give him/her your footage. Would they feel a need to pay a commercial operator to get the footage? Food for thought.

In this case, it was never planned and I thought that they’d use some footage along with more traditional ground based band video fodder. This record is a 2018 release and the video is a promo piece. I shot at the two different studios were we worked. The first half is in El Paso from Sonic Ranch and as you can see it’s on a Pecan orchard. The second half is Stinson Beach. So since it was never planned and the editor is a salaried employee of the label, no money changed hands save the $280.00 I paid the State of California in a traffic ticket. And since it’s for promo on the internet, there is no back end monetizing. That’s kind of the state of the whole music biz now. So this becomes promotional all around and done in a spirit of friendly cooperation to help our mutual project - the record and pre-sales - a boost. The editor is British btw...and he’s got a good eye. Maybe I should get you in touch?

 

[Ty Pilot]

One of the Youtube channels I follow is a guy that is now a 107 operator and he had the opportunity to visit with an FAA official and asked specific questions similar to yours. He found that doing any aerial work that is used to further any business is considered commercial. If you want me to post a link to the video here I will. Another thing is; maybe just call your local FAA field office and explain to them just as you did here and see what they say.

 

[PatR]

The U.S. FAA does make it clear that if anyone obtains "consideration" from aerial drone imagery it's a commercial endeavor, even if the drone operator is excluded from that consideration. Promotional work is commercial.

 

[FlushVision]

The U.S. FAA does make it clear that if anyone obtains "consideration" from aerial drone imagery it's a commercial endeavor, even if the drone operator is excluded from that consideration. Promotional work is commercial.

Promotional work in the U.K. is also considered to be commercial too, but as far as I can tell, if a pilot is not receiving any consideration for his work (other parties are benefiting, not him) then he is good to go. For example, if someone takes aerial footage of his own golf course, say, and uses that footage to promote his golf course, it is commercial. He isn't being paid directly for it but he is benefiting from the publicity gained. If he takes footage of someone else's golf course and does not receive any consideration (he's done it out of the goodness of his heart), then that isn't a commercial flight.
I could be wrong, but that's the way I understand it.

 

[PatR]

U.K. and U.S. Do not share that perspective.

 

[CraigCam]

Interesting. So posting any video you have shot on any social platform is illegal as it’s sole purpose is unbridled promotion. Technically, I’m in violation by sharing my video of CCC work I did earlier in the year on this forum since it could be viewed as promotion for Tuna’s hard work?

 

[PatR]

If Tuna was use it in a manner that increased his sales, technically yes. If it was established your work could increase his sales, technically yes. Realistically they don't push it that hard. If you were shooting videos of car dealerships or similar, giving them the product and they used any of it in advertising they would be more apt to start sending letters. Get the 107, they are not difficult to obtain. If you're going to do the work you might as well charge for it. Not charging for it does you no good.

 

[CraigCam]

Agreed. That helps.

 

[FlushVision]

If Tuna was use it in a manner that increased his sales, technically yes. If it was established your work could increase his sales, technically yes. Realistically they don't push it that hard. If you were shooting videos of car dealerships or similar, giving them the product and they used any of it in advertising they would be more apt to start sending letters. Get the 107, they are not difficult to obtain. If you're going to do the work you might as well charge for it. Not charging for it does you no good.

But doesn't the fact that Tuna lives in England and CraigCam lives in U.S.A muddy those waters? I honestly don't know...just putting it out there.

I agree, get the part 107 (U.S.A.) or PfCO (U.K.) to be on the safe side.

 

[PatR]

For the purposes of this discussion I don't believe activity demonstrating Tuna's App as an educational tool for other subscribers to the App to learn from, who provides the education and who benefits from it, has any concern.

Disclaimer: I am not an attorney and do not offer legal advice. Regulations concerning the definition and scope of commercial operations are published in the Code of Federal Regulations and the Federal Aviation Administration regulations. Those regulations provide considerable explanation of how the FAA defines "commercial" and their scope of authority. Unfortunately they don't make locating all the terms, definitions, and regulatory sub sections easy to locate and identify.

A more important condition is how the FAA defines "commercial" if and when they get "into the weeds" should they elect to go after someone. Since the FAA regulates U.S. airspace, aircraft, flight regulations, pilot certification, etc., their concern is focused primarily on what happens here in the U.S. Where something is done would be more important than where the end result of that something was used or delivered.

 

[AH-1G]

When speaking with an FAA official last month or so, their biggest concern is safety, so lets say abc company advertises an aerial photo shot of real estate and not having a 107 pilot doing the aerial, yes illegal, but FAA considers this the bottom of the totem pole for prosecution at this time. Not saying they wont. Now same scenario, if it involved where there were safety concerns such as within ATC, over people, reckless flying then they may bump this up on the list. They cannot prosecute unless they see this in action and the person flying the drone. That what was told to me by an FAA official who also heads up checking out drone incidents here in Orlando. First penalty, written notice, 2nd $1,100.00 fine, 3rd penalty "firing squad" First two penalties are for sure.