Operating a drone? Check your coverage

A happy couple was enjoying their wedding with their family and friends when disaster struck. The couple hired a wedding photographer to record the wedding and reception. In the course of performing his services at the wedding, the photographer used a drone to take pictures and record video. The drone accidentally hit one of the wedding guests, causing the guest to lose her eye.

A claim was made against the wedding photographer’s commercial general liability (CGL) insurance policy. However, the insurance company denied the claim asserting that the claim was excluded under the aircraft exclusion provision in the policy.

Eventually, the injured wedding guest filed suit against the photographer asserting negligence, and the photographer sought a defense under his CGL policy. The insurance company initially provided a defense under a reservation of rights, but then filed a declaratory judgment action asking the court to declare that the insurance company was not liable under the policy and that it had no obligation to provide a defense to its insured for the injury caused by the drone.

The court in Philadelphia Indem. Ins. Co. v. Hollycal Prod., Inc., noted that the CGL policy specifically excluded any bodily injury arising out of the use of an “aircraft” operated by an insured. While the policy did not define the term “aircraft,” the court held that the word was unambiguous and its ordinary meaning, as defined by Merriam–Webster’s Collegiate Dictionary, is “a vehicle (such as an airplane or balloon) for traveling through the air.”

The court held that the definition of aircraft included a drone. Accordingly, the court granted summary judgment in favor of the insurance company finding that the policy did not cover the claim and that there was no duty to defend the claim. The court even awarded the insurance company the costs of defense it incurred while providing a defense under its reservation of rights.

Drone use is steadily increasing commercially with virtually limitless applications and possibilities for causing personal injury or property damage. However, many CGL policies may exclude coverage under the aircraft exclusion.

Accordingly, if you are using a drone or contract the use of drone services, make sure you contact your insurance carrier about coverage and determine whether an endorsement to an existing policy or a specialty policy is required to cover your drone-related activities.

Michael Stover has practiced law for over 27 years. At Wright, Constable & Skeen he practices predominately in surety and construction law, and is well experienced in government contracts, professional liability, and general litigation. Contact him at mstover@wcslaw.com.