Drones: Assessing the Risks
Whether you hire a company to operate a UAV or do it yourself,
know your insurance options.
Amid the game-changing excitement
over drones in real estate, don’t let the
liability issues they create fly under the
radar. Suppose you’re working with a
professional photographer who has
already received a Section 333 waiver
from the Federal Aviation Administration
to operate unmanned aerial vehicles.
Are you aware of your coverage under
your brokerage’s errors and omissions
insurance if the drone hits someone or
damages property and a liability claim
is filed against you? The scenario may
sound hypothetical, but it’s one you
need to consider as unmanned aerial
photography and video assume a bigger
part of real estate marketing.
You can’t assume your brokerage’s
E&O policy—or your own coverage, if you
have an individual policy—would cover an
accident caused by something so new to
the industry as drone technology. Until
drone use becomes firmly established in
the business and develops a substantial
track record, insurance coverage will generally remain a gray area to be decided on
a case-by-case basis by different carriers.
Here are steps you can take to mitigate your risk.
Examine your current policy. Ask your
insurance agent or broker to examine
your commercial general liability insur-
ance policy and work with the insurance
company that issued the policy to provide
an endorsement to cover drone-related
incidents. For coverage to apply, there
needs to be a description of the un-
manned aircraft and a description of the
operations or projects to be performed.
These descriptions can be as broad
as “all unmanned aircraft used in the
insured’s business for any operation or
project connected to the insured’s busi-
ness” or as narrowly tailored as “opera-
tion of Model BX500 unmanned aircraft,
serial number 1247ZQ, used to take aerial
photos of 12 Main Street, Macon, Ga., on
Dec. 1, 2015.”
Consider drone insurance. If you are
using drones or intend to, talk to an
independent insurance agent or broker
about getting unmanned aircraft or drone
insurance. Do this even if you’re working
with aerial photographers who have the
proper FAA waiver to operate drones.
They might have their own coverage, but
their coverage won’t necessarily help you
if you’re held liable separately from them.
Check into personal injury liability. Talk
to your agent about obtaining coverage in
an E&O policy for personal injury liability.
This can occur when a drone operator
takes a photo that infringes on the pri-
vacy rights of another party. For example,
a drone operator takes a picture of a
home for a marketing brochure. The pic-
ture also includes part of the neighbor’s
backyard where teenagers are sunbath-
ing. If the broker prints and distributes
hundreds of copies of the brochure and
the neighbor finds out, there could be a
privacy violation and the neighbor could
make a claim against the real estate
practitioner for an error or omission in his
or her professional services.
Inquire about legal defense costs. Ask
about legal defense costs. If you are hit
with a claim, and you don’t have separate
unmanned aircraft or drone coverage,
then it’s possible your E&O policy could
cover your defense costs, as well as liability, for personal injury.
Right now, the commercial use of drones
requires an FAA exemption, and that exemption has been granted to about 1,800
operators across the country, including
hundreds that provide aerial photography
and video services for consumers and
Also, hobbyists and amateurs must
register all drones weighing between
0.55 pounds and 50 pounds with the
FAA by Feb. 19, 2016.
Later this year, the FAA is intending
to issue a final rule setting forth requirements for anyone operating drones
commercially. At that point, whether
you personally operate a drone in your
business or hire another company to do
so, making sure that you’ve protected
yourself as fully as possible should give
you peace of mind as you set out to provide bird’s-eye property views in your
real estate marketing.
Eric Myers is vice president
and real estate program manager at Victor O. Schinnerer
& Co., a REALTOR Benefits®