Additional coverage – additionally acquired unmanned aircraft

Covered causes of loss and exclusions

Limits of insurance

Deductible

Valuation of data and electronic media

Coverage territory

Coinsurance

Definitions

Introduction

Unmanned Aircraft Systems (UAS), such as drones, are robots with the ability to hover, which makes them useful for using video cameras to record data; hence their use in firefighting, surveillance, and traffic monitoring. They can also be used for delivering smaller packages or spraying crops. They can be controlled remotely similar to how remote hobby aircraft are controlled, but they can also be programmed to fly independently using GPS navigation.

The IH 99 29 form is used in conjunction with the Commercial Inland Marine Conditions Form, CM 00 01 09 04, and the Common Policy Conditions Form, IL 00 17 11 98, to cover unmanned aircraft and cargo against direct physical loss or damage, including that which occurs when the unmanned aircraft are used in commercial or civil operations. It can be endorsed to the Contractors Equipment Coverage Form, Machinery And Equipment Coverage Form, and the Miscellaneous Articles Coverage Form.

 The coverage can be written on a blanket or scheduled basis.

 ISO's Inland Marine Handbook lists several factors and characteristics that should be considered when underwriting unmanned aircraft, including if the craft is manufactured commercially or built from a kit; the year it was built; the maximum speed and flight radius; the altitude and duration of flight; payload capacity; if the aircraft has been modified after manufacture in order to increase speed, range, payload capacity, or other capacities; if the craft can be operated beyond line-of-sight; if geofencing technology is included (aids in avoiding restricted airspace); if collision avoidance and return-to-home technology is included; if the operating software uses encrypted link technology; how complex the aircraft is to operate; if the insured owns, rents, or leases the aircraft; and the number of unmanned aircraft the insured owns, rents, or leases.

 Coverage

 1. Covered Property – Unmanned Aircraft

We will pay for direct physical loss of or damage to the following Covered Property from any of the Covered Causes of Loss:

"Unmanned aircraft" owned by you, or rented or leased to you if you have a contractual responsibility to insure, that are described in the Schedule. However, if loss or damage occurs while such "unmanned aircraft" are in flight, in preparation for flight or being transported to or from the launch or landing site, coverage applies only if such use is part of "unmanned aircraft operations".

Coverage for such "unmanned aircraft" includes the following property but only if such property is not covered under the Coverage Form to which this endorsement applies:

a.Equipment used with such "unmanned aircraft" provided such equipment is essential for operation of the "unmanned aircraft" or for executing "unmanned aircraft operations"; and

b.Data generated as part of "unmanned aircraft operations" and the electronic media on which such data is processed, recorded or stored, such as software, films, tapes, discs, drums or cells.

2.Property Not Covered provisions in this Policy that address aircraft do not apply to the property addressed in Paragraph A.1., but such exception only applies with respect to the coverage provided under this endorsement.

 Analysis

 The form promises to pay for direct physical loss or damage to unmanned aircraft. "Unmanned aircraft" is a defined term on the form, meaning an aircraft that is not designed, manufactured, or modified after manufacture to be controlled directly by a person from within or on the aircraft. Such aircraft are generally operated by remote control or programmed to fly via GPS navigation.

 The aircraft must be owned, rented, or leased by the insured or for which the insured has a contractual responsibility to insure. Loss to such craft is covered in flight, in preparation for flight, or being transported to or from the launch or landing site only if this use is part of the unmanned aircraft operations. "Unmanned aircraft operations" is a defined term in the policy meaning the operations described in the declarations. Operations may include fire fighting, aerial photography, or delivery of goods. If, for instance, the insured's unmanned aircraft operations are described in the declarations as delivery of goods and the aircraft is damaged in flight while being used to take wedding photos for the insured's cousin, that damage would not be covered if aerial photography was not described as part of the operations.

 The associated equipment and data generated as part of the operations are also covered, as well as the media on which the data is processed, recorded, and stored. Such items as remote controls and the software that processed the data collected would be covered.

 The property is covered only if not already covered under the coverage form to which the endorsement applies. So, if the property is covered by the Miscellaneous Articles Coverage Form, it cannot be covered by this form, too.

 Additional Coverage – Additionally Acquired Unmanned Aircraft

 The Additional Coverage – Additionally Acquired Property in the Coverage Form is replaced by the following but only with respect to the coverage provided under this endorsement:

If during the policy period you acquire "unmanned aircraft" of a type described in the Schedule (including the related property addressed in Paragraph A.1.), for use in "unmanned aircraft operations", we will cover such "unmanned aircraft" (including the related property addressed in Paragraph A.1.) for up to 30 days, but not beyond the end of the policy period.

In any one occurrence, the most we will pay for the total of all loss or damage to all such "unmanned aircraft" (including the related property addressed in Paragraph A.1.) is the lesser of:

1.25% of the total of the Limits of Insurance shown in the Schedule for "unmanned aircraft" described in the Schedule; or

2.$50,000.

You will report values of such "unmanned aircraft" (including the related property addressed in Paragraph A.1.) to us within 30 days from the date you take possession and will pay any additional premium due. If you do not report such "unmanned aircraft" (including the related property addressed in Paragraph A.1.), coverage will cease automatically 30 days after the date the "unmanned aircraft" (including the related property addressed in Paragraph A.1.) is acquired or at the end of the policy period, whichever occurs first.

The Coinsurance Additional Condition does not apply to this coverage.

This Additional Coverage does not increase the applicable Limit Of Insurance shown in the Schedule.

This Additional Coverage does not apply to "unmanned aircraft" (including the related property addressed in Paragraph A.1.) covered on a blanket basis.

 Analysis

 The form provides minimal coverage for additionally acquired property—the lesser of 25 percent of the limit or $50,000—for up to thirty days or until the end of the policy period, whichever is first. The insured must report the values of the acquired aircraft within thirty days of taking possession in order for coverage to be provided. Additional premium must also be paid. If not reported, the coverage will cease after thirty days or at the end of the policy period.

 Covered Causes Of Loss And Exclusions

 Coverage provided under this endorsement is subject to the Causes of Loss and Exclusions applicable to the Coverage Form to which this endorsement is attached, and is also subject to the following exclusions: