|

1. Exclusion 2.g. Aircraft, Auto Or Watercraft under Section I – Coverage A – Bodily Injury And Property Damage Liability is replaced by the following:

2.  Exclusions

This insurance does not apply to:

g.  Aircraft, Auto Or Watercraft

(1) Unmanned Aircraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft that is an "unmanned aircraft". Use includes operation and "loading or unloading".

This Paragraph g.(1) applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft that is an "unmanned aircraft".

 Analysis:

This endorsement removes the aircraft, auto, or watercraft exclusion from the CGL form and makes significant changes. First, it excludes injury or damage from the use, maintenance, or entrustment to others of an "unmanned aircraft." "Unmanned aircraft" is a defined term now, and is defined later in the policy as "any aircraft that is not designed, manufactured, or modified after manufacture to be controlled from a person within or on the aircraft." This is an aircraft that is controlled by a person on the ground, using handheld controls in order to maneuver the vehicle to wherever the operator wants the craft to go. Drones can also fly autonomously, something that separates them distinctly from hobby radio controlled aircraft. Any use is excluded, including loading and unloading. Loading and unloading become a concern if the drone is used to carry cargo or load or unload vehicles; certain drones can carry a significant amount of weight and could be used for such activities. Drones, or unmanned aircraft, are different than commercial airliners and radio controlled hobby aircraft.

The exclusion applies without exception, even if the claims arise from any alleged negligence or other wrongdoing by the insured of any supervision, hiring, employment, training or monitoring of others by the insured that cause injury or property damage involving the drone. For example, a university hires someone to fly its drone over the homecoming game and videograph the event. While making the video, the operator diverts from the event and flies low enough over the audience to cause alarm in the crowd and buzzes pedestrians. Should a spectator file an injury claim against the operator and the university, the university would have no coverage for such actions once the endorsement has been added. 

(2) Aircraft (Other Than Unmanned Aircraft), Auto Or Watercraft "Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft (other than "unmanned aircraft"), "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".

This Paragraph g.(2) applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the "occurrence" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft (other than "unmanned aircraft"), "auto" or watercraft that is owned or operated by or rented or loaned to any insured.

This Paragraph g.(2) does not apply to:

(a) A watercraft while ashore on premises you own or rent;

(b) A watercraft you do not own that is:

(i) Less than 26 feet long; and

(ii) Not being used to carry persons or property for a charge;

(c) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured;

(d) Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft or watercraft; or

(e) "Bodily injury" or "property damage" arising out of:

(i) The operation of machinery or equipment that is attached to, or part of, a land vehicle that would qualify under the definition of "mobile equipment" if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged; or

(ii) The operation of any of the machinery or equipment listed in Paragraph f.(2) or f.(3) of the definition of "mobile equipment".

Analysis:

This section is identical to the exclusion in the CGL form. It maintains the exclusion for aircraft other than unmanned aircraft, watercraft and automobiles. There are exceptions to the exclusion for various types of watercraft depending on ownership, length, and activity. Exceptions for autos exist for the parking of vehicles on or next to premises the insured owns or rents or the operation of machinery or equipment that is attached to a vehicle. The operation of the vehicle itself is not covered, but if the insured is operating equipment attached to the vehicle that would qualify as "mobile equipment," then coverage applies. "Mobile equipment" is a defined term found in the CGL policy. Mobile equipment includes such items as bulldozers, forklifts, vehicles on crawler treads, vehicles with permanently mounted cranes, shovels, loaders, diggers, and other types of equipment. See Commercial General Liability Definitions.