4K views of Upper West Side, Manhattan, New York from DJI Phantom 3 Professional focusing on the famous San Remo in Ultra HD 2160p.

Your real estate firm needs to have a look at the roof of a twenty-story building, no problem; send in the Drone. With UAV (unmanned aerial vehicle) technology advancing at light-speed rates, and with competition driving down the costs, Drones have become a very hot commodity. A whopping 1.6 million of them were sold in 2015, and reports are estimating over 600,000 of them will be sold in 2016 just for commercial use. The applications for UAVs are growing everyday as industry after industry discovers how UAV technology can make business life more efficient in many, many ways. Think of an industry where you use your eyes and ears, and that industry may very well be a commercial Drone candidate. Suffice it to say; this is going to be very big business.

What About The Insurance?

Most consumers and business owners haven't given a lot of thought to the risk of using drones because nothing terrible has happened yet, or if it did, it just hasn't made the news cycle. But, if the business owner will step back and think about it, bad things will always happen, and they will always cost your business a lot of money. It's just a toy plane with a camera, right? Consider this:

·         Your company's drone could malfunction and crash into a building, a car, or worse yet, a person.

·         Your drone could interfere with an airplane. There have been more than 25 near misses reported to the FAA. Doesn't a near-miss also mean a near-hit?

·         The invasion of privacy lawsuits are probably being considered as this article is written.

Many business owners who contract out for drone services are mistaken if they believe that only the contractor must be insured. Any business who has been named in a lawsuit as a result of a contractor knows that the line of liability can easily become blurred. Whether the business owns the drone or uses a contractor, insurance coverage is a must.

Aren't There Some Rules?

Yes and no. It depends on how you use your drone. The FAA is in charge when it comes to the commercial use of drones. Unfortunately for this exploding market, government agencies are never in a hurry nor are they well-prepared. Drone owners and contractors are growing frustrated as the FAA reveals they are incapable of keeping pace with an exploding industry that they are in charge of. Licensing is taking much longer in the U.S. than other countries who have embraced this new technology. Some of the largest commercial users, such as Amazon, have complained that the FAA cannot keep up.

What Kind of Insurance do I Need?

Since the drone industry continues to evolve, the insurance industry is continually familiarizing itself with potential issues and risks. Some carriers have announced that they will introduce an insurance package specific to commercial drone use on a country-by-country basis based on the local demand and the regulatory environment governing drones in each country.

For now, an aviation policy should suffice as long as it provides the following coverage:

o   Aircraft Liability

o   Physical damage that includes the value of ground support equipment and devices

o   Products Liability for manufacturers, repair facilities, and retailers

If your business is currently using drones or contracting with a service that uses drones, your standard Business Owners Policy or Commercial Package will most likely fall short of providing sufficient coverage.

Contact an insurance professional at Skyline Risk Management, Inc. (718) 267-6600 to discuss the proper coverage for your business.