Inside Unmanned Systems

DEC 2016-JAN 2017

Inside Unmanned Systems provides actionable business intelligence to decision-makers and influencers operating within the global UAS community. Features include analysis of key technologies, policy/regulatory developments and new product design.

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45 unmanned systems inside December 2016/January 2017 ENGINEERING. PRACTICE. POLICY. Those numbers may go up as drones, their sensors and their missions become increas- ingly sophisticated. Miller said his firm insures actual drone physical damage values and li- ability limits into the hundreds of millions of dollars. "It is not unusual to see $10 million to $50 million carried on a drone." "The highest liability limit we've been asked to provide to any professional drone operator is $100 million," said Chris Proudlove, a senior vice president at Global Aerospace and the manager of UAS risks. His firm, a specialist aviation insurance provider launched in 1924, has aviation customers used to buying $250 million in coverage. The cost for that basic $1 million policy starts in the high hundreds of dollars annually, accord- ing to those who spoke to Inside Unmanned Sys- tems, depending on the drone and its mission. The premium for a $5 million policy would run from around $2,500 to $3,500 or more a year depending on a number of factors including the platform, sensors and intended uses. Assessing Risk To better judge the risks they are covering, firms are now tracking losses and asking a lot more questions. "Over the past five to six years we've been re- vising the questions we're asking," Miller said. "It's been a learning process, obviously, so as we began insuring them (drones) and seeing how they were used, types of changes required for the policies midterm, such as limit require- ments. As we started to experience losses it showed us that maybe we needed to ask dif- ferent questions along the way in our applica- tion process to determine the exact exposure as best we could." For example, Miller said, they began asking how many over-the-water f lights an operator expected to make after one client claimed to have crashed three drones into Florida's alli- gator-infested waters in a single year. "There's no way to prove they did; there's no way to prove they didn't—so they're covered. We go out and pay for the drones," Miller said. Insurance and brokerage firms, including Miller's, are now building the sort of databases other insurance firms have on cars, campers and planes—marking the track records and repair costs of different UAS models. "We're comfortable with many makes and models of drones and are beginning to see a picture of the personality, of what the culture is, among operators of certain types," Miller FOR MORE INFORMATION: ARTHUR J. GALLAGHER & CO. Katie Escalante Katie_escalante@ajg.com www.ajg.com/lightaircraft GLOBAL AEROSPACE Chris Proudlove cproudlove@global-aero.com Bryant Dunn bdunn@global-aero.com www.global-aero.com/unmanned-aircraft- systems-uas-insurance/ TRANSPORT RISK INSURANCE Terry Miller tmiller@transportrisk.com unmannedrisk.com OTHER SOURCES FOR COVERAGE: http://uavcoach.com/drone-insurance- guide/#Companies A man uses a drone equipped with an AIRWARE OPERATING SYSTEM to check his roof. "ONE OF THE SECTIONS under the war endorsement covers hijack. So if the drone was taken over by a third- party—somebody hacked into the system and took control of it while it was in fl ight—that would be a hijack risk that would be covered under the war endorsement." Chris Proudlove, Senior VP and UAS risk manager, Global Aerospace

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