ISO introduces drone insurance coverage options for commercial inland marine market

ISO announced on Monday that it is preparing for the “potential rise and fall of commercial drones” with new inland marine insurance forms to help protect businesses from the costs of such potential crashes, including damage to the drones, their equipment and their cargo.

The new forms from ISO, a Verisk Analytics business, provide insurers with underwriting tools to address commercial drones, which have developed a wide range of potential and reported uses, including package delivery, crop protection and aerial photography, ISO said in a statement. For enhanced flexibility, the new coverage options allow for drones to be covered under a standalone coverage form or by endorsement to some ISO commercial inland marine classes.

In addition, ISO has introduced a comprehensive advisory application, sample instructions that provide details on some coverage features of the new ISO forms, general underwriting considerations to help evaluate related property drone risks and loss control recommendations to aid in the mitigation of potential exposures.

“Drones are mobile in nature, can be of high value, and contain specialized equipment—making them ideally suited for coverage under commercial inland marine insurance,” said Doug Kahn, director of commercial property product development for ISO, in the statement. “The new flexible coverage options can help insurers protect businesses that may face a wide range of drone exposures.”

These options come less than a year after ISO’s commercial drone liability coverage and exclusion options took effect in most ISO jurisdictions for ISO’s commercial general liability and commercial liability umbrella/excess programs. Options are available to address a number of potential exposures with respect to bodily injury, property damage and other potential liability related to drones.

The new drone insurance coverage came a little more than a week after a drone came within 200 feet of hitting a Lufthansa jet near Los Angeles International Airport on March 18, The Associated Press reported at the time. The plane was flying at 5,000 feet, about 14 miles east of the airport, over the heavily populated suburbs of Los Angeles. It landed safely.

The coverage also comes months after Intact Insurance, Canada’s largest home, auto and business insurance company, announced on Jan. 18 that it had launched drone insurance for its commercial lines customers. The unmanned air vehicle (UAV) coverage “caters specifically to small and medium-sized businesses that currently use or plan to use drones to complement their business operations,” Intact Insurance said at the time.