1. What Risk Managers Need to Know
Game of Drones:
What Risk Managers Need to Know
to Keep Their Heads
When Dealing with UAVs
Brendan C. Holt C. Lily Schurra
Saxe, Doernberger & Vita, P.C. Saxe, Doernberger & Vita, P.C.

2. FAA Can Investigate THIS

3. An Industry Poised to Take Off:
FAA Sales Growth Estimates:
Hobbyist drone sales could expand from 1.9 million in 2016 to 4.3 million in 2020
Commercial drone sales could increase from 600,000 in 2016 to 2.7 million by 2020.
Drone Services Industry:
Revenue could increase from $170 million in 2015 to $8.7 billion by 2025
Comparison to Auto Industry:
From increase of 1.2 million cars on the road.

4. Uses: The Sky’s The Limit
Aerial imaging
3-D modeling and surveying
Security of property and job site
Scanning and detecting damages
Real-time monitoring of project progress
Emergency management / monitoring
First Responders
Municipalities
Insurance companies

5. FAA Regulatory Framework
Aircraft Requirements
FAA airworthiness certification not required
Aircraft registration required
Aircraft markings required
Part 107 – remote pilot certificate
Requires passing of Initial Aeronautical Knowledge Test
TSA background check
Application process can take 4-6 weeks
Carriage of Cargo
Now allowed
Maximum weight – 55 lbs.
Required preflight check of security of load
Must meet all other operating limitations or have a waiver
Visual Line of Sight (VLOS)
Operator must be able to see aircraft at all times
Night time operations prohibited
Operational Limited Continued:
Maximum altitude of 400ft above ground level
No operations above 18,000ft
Waivers
Can waive some 107 limitations
Must prove safety of operations and justification for waiver

6. Potential Liabilities
Third-party Bodily Injury
Third-party Property Damage
Privacy Violations
Data Breach
Contractual Liability

7. CGL and Data Liability Coverage Issues
CGL Coverage Part A – Aircraft, Auto or Watercraft Exclusion
2. Exclusions
This insurance does not apply to:
g. Aircraft, Auto or Watercraft
‘Bodily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft…
Exception to Exclusion g.
This exclusion does not apply to:
(4) Liability assumed under any ‘insured contract’ for the ownership, maintenance or use of aircraft…
CGL Coverage Part B – Relevant Exclusions
2. Exclusions
This insurance does not apply to:
a. Knowing Violation Of Rights Of Another
‘Personal and advertising injury’ caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict ‘personal and advertising injury’.
d. Criminal Acts
‘Personal and advertising injury’ arising out of a criminal act committed by or at the direction of the insured.
p. Recording And Distribution Of Material Or Information in Violation of Law
…(4) Any federal, state or local statute, ordinance or regulation…that addresses, prohibits or limits…collecting, recording, sending, transmitting, communicating or distribution of material or information.
Data
PII/Data

8. Other Policies & ISO Endorsements
Drone Specific Policies
Aviation/Aircraft Specific Policies
New ISO CGL Unmanned Aircraft Endorsements:
CG Exclusion - Unmanned Aircraft
CG Exclusion- Unmanned Aircraft (Coverage A Only)
CG Exclusion - Unmanned Aircraft (Coverage B Only)
CG Limited Coverage for Designated Unmanned Aircraft (Coverage Parts A and B)
CG Limited Coverage for Designated Unmanned Aircraft (Coverage A Only)
CG Limited Coverage for Designated Unmanned Aircraft (Coverage B Only)

9. Take Aways Know what is (or isn’t!) in your insurance program
Make sure discrete lines of insurance align
Tailor contractual risk transfer
Insurance requirements
Indemnity

10. Thank You! Brendan C. Holt 203.287.2124 bch@sdvlaw.com C. Lily Schurra