Munich Re US Launches Commercial Drone Operator Liability Endorsement

Munich Reinsurance America Inc. (Munich Re, US), has launched a new commercial drone insurance product that offers customized liability for insurance companies and their small-to-medium size businesses using drones under Federal Aviation Agency (FAA) Rule 107.

Rule 107 went into effect in August 2016, opening the skies to any non-recreational operator in U.S. airspace who completes a certification process. The FAA anticipates that 2.7 million commercial drones could be in use by the year 2020.

“New regulations have spurred the commercial use of drones across a broad spectrum of industries from photography and security to firefighting and law enforcement. But as companies and public entities find new, safe and cost effective ways to use drone technology, most commercial insurance policies don’t cover or offer very limited liability protection for drones,” said Tim Brockett, senior vice president, Reinsurance Division Strategic Products, Munich Re, US.

Brockett added the drone liability endorsement addresses the emerging market need and offers a customized insurance for companies to protect against potential liability as the result of using drones.

The endorsement can be attached to an existing commercial general liability insurance policy purchased through a participating insurance carrier. The endorsement provides bodily injury and property damage liability and/or personal injury liability coverage for drones that are under 55 pounds.

It is designed for small to medium size businesses and farm and agricultural operations in the U.S. that utilize drones to support other sources of revenue. The endorsement can be customized based on insurance carriers’ existing commercial lines policies and their policyholders’ needs. Claims are handled by the insurance carrier.

Brockett said insurance carriers that offer the endorsement to their commercial policyholders will have access to an Application Programing Interface (API) that will also verify that the drone and drone pilot have active and valid registrations with the FAA.

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