Insurance Academy

Drone Coverage: Into the Great Unknown

By | July 27, 2015

Insurance Services Office (ISO) recently released a “matched set” of drone-related endorsements for use with the commercial general liability (CGL) policy: three exclusionary endorsements and three “limited coverage” endorsements. All six endorsements have a 06 15 edition date and are available for use once approved by the individual state departments of insurance.

Three Exclusionary Endorsements

ISO gives insurance carriers the option to exclude injury or damage caused by drone use with the introduction of three exclusionary endorsements: These are:

  • Exclusion – Unmanned Aircraft (CG 21 09 06 15): This is the most comprehensive exclusionary endorsement, excluding the use of unmanned aircraft in both Coverage Part A (Bodily Injury and Property Damage) and Coverage Part B (Personal and Advertising Injury);
  • Exclusion – Unmanned Aircraft (Coverage A Only) (CG 21 10 06 15): As the name suggests, this exclusionary endorsement applies to Coverage A only; and
  • Exclusion – Unmanned Aircraft (Coverage B Only) (CG 21 11 06 15): This endorsement applies to Coverage B only.

Three “Limited Coverage” Endorsements

Insurance carriers also have the option to extend coverage for injury or damage caused by a drone using one of the three “limited coverage” endorsements promulgated by ISO. These limited coverage endorsements mirror the exclusionary endorsements in the manner in which they apply (and even the majority of the wording is the same). ISO’s three limited coverage endorsements are:

  • Limited Coverage for Designated Unmanned Aircraft (CG 24 50 06 15): This endorsement extends limited protection under both Coverage Parts A and B;
  • Limited Coverage for Designated Unmanned Aircraft (Coverage A Only) (CG 24 51 06 15): Extends protection for Coverage Part A – bodily injury and property damage – losses only; and
  • Limited Coverage for Designated Unmanned Aircraft (Coverage B Only) (CG 24 52 06 15): Provides limited drone-related coverage for Personal and Advertising Injury (Coverage Part B) losses only.

Three Questions Created with the Introduction of These Endorsements

Now that ISO has addressed the issue of drones in the CGL, what problems are created? What questions now exist? The Academy of Insurance created a webinar that answers three of these questions:

  1. Didn’t the unendorsed CGL adequately exclude coverage for the use of drones?
  2. How is coverage triggered if a “Limited Coverage” endorsement is allowed by the carrier?
  3. How does ISO’s definition of “unmanned aircraft” differ from the FAA’s and other governmental bodies? Will this difference cause a problem when a claims occurs?

Follow this link to the Academy’s drone webinar. In addition to the webinar, you receive a white paper covering much of the information presented in the webinar.

About Christopher J. Boggs

Chris Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS, is a veteran insurance educator. He is Executive Director, Big I Virtual University of the Independent Insurance Agents and Brokers of America. He can be reached at chris.boggs@iiaba.net. More from Christopher J. Boggs

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