Exclusions

Limits of insurance

Deductible

Valuation of cargo owned by the insured

Valuation of cargo in the insured's care, custody, or control

Valuation of data and electronic media

Option for valuation at replacement cost (unmanned aircraft and/or cargo owned by the insured)

Additional conditions

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 00 61 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.

 The coverage can be written on a blanket or scheduled basis. Some types of cargo that are listed as property not covered may be added via a description in the declarations.

 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 (which 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.

 The Inland Marine Handbook also urges underwriters to consider cargo—the type, who owns it, and its susceptibility to theft and damage—and the types of operations and uses, such as aerial photography, fire fighting, utility inspection, movement of inventory, and delivery of goods. Other factors to consider include the frequency, duration, and distance of flights; if the aircraft is flown indoors; the flight path—over water, in urban or rural areas, or on the insured's private land; and alignment of operations with the capabilities of the aircraft.

 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 Declarations. 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:

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.

 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.