AAIS Releases New Drone Coverage Forms, Rules Filings Ahead of FAA Regulations

The American Association of Insurance Services (AAIS), a non-for-profit national insurance advisory organization, announced new filings of Unmanned Aircraft Liability Coverage forms and rules in their Agricultural General Liability Program (AgGL), in response to consumer demand for coverage for unmanned aircraft or “drones.” AAIS also filed a new personal & advertising injury liability aircraft exclusion created to address new liability exposures associated with this nascent technology.

As of Aug. 22, the new AgGL Unmanned Aircraft Coverage endorsements are approved in 34 states.

AAIS’ new endorsements were created in anticipation of the Federal Aviation Administration’s (FAA) long-awaited Final sUAS Regulations for small commercial UAS (under 55 pounds). The new regulations were published June 21, 2016 and will become effective Aug. 29, 2016. The economic impact of this ruling is expected to be first felt in farm and agribusiness as it is the fastest growing commercial sector using drones.

AAIS currently provides two specialized agricultural general liability (AgGL) products: one to meet the needs of large farms and one for commercial agricultural exposures. The AgGL program includes coverage of more than 300 expert classes, thus writing a separate commercial general liability policy is not necessary with the AAIS coverage forms.

According to AAIS, unmanned aircraft is expected to revolutionize American farming and agricultural operations through increased commodities production in the United States. Drones can monitor livestock and increase crop yields by identifying specific regions of irrigation problems, insect infestations, and other exposures that previously devastated operations. Using a specialized camera attached to the drone, infrared maps produce measurable data, photographs and valuable insights improving business production. The soon-to-be-effective sUAS FAA regulations allow farm/ag operations to monitor from a maximum of 400 feet.