"In the beginning, neither the government nor the insurance industry was prepared to deal with this entirely new technology as fast as it became available," said independent agent Gerry Zoller. "Today, we see uniform government regulations and several insurance companies interested and proficient at writing most drone operations."
American Heritage Insurance Agency, Inc.
How did you get started at your agency?
Years ago, my first insurance job was in commercial package underwriting. After various company positions and working at two different independent agencies, I started my agency from scratch without customers in 1983. It was a time when there were no computers or cellphones. Fax machines had just started showing up in our industry.
Why drone insurance?
Several years ago, we were looking for a niche market that was not pursued by most agents. Predictions at the time showed the use of drones for commercial purposes would be exploding as more businesses discovered their versatility.
In the beginning, neither the government nor the insurance industry was prepared to deal with this entirely new technology as fast as it became available. Initially, there were no regulations for operators and no specific policy forms to address the exposures to loss. This meant we did a lot of searching for what we needed. Today, we see uniform government regulations and several insurance companies interested and proficient at writing most drone operations.
Many drone operators don't stay in the drone business long term. We find many operators start with one client, but have a hard time developing enough business to keep going full time.
Another challenge has been that relatively new industries don't have a good way to track and record losses. Additional potential carriers still worry about liability. Today, we see more claim frequency in physical damage to drone equipment.
I believe the ease of policy and certificate issuance, as well as the ability to make policy changes quickly, will be important in the future. Carriers who have been writing drone insurance the longest understand that operators need rapid turnaround because drone projects are normally of short duration and scheduled equipment can change often. Drone operators are essentially contractors with frequent jobs who tend to change equipment more often than other types of contracting risks.
Advice for a fellow agent regarding drone insurance?
If you decide to insure commercial drone operators, follow the basics: find the available insurance markets; understand their products and read their policies; learn about the customer and their operations by immersing yourself in their industry; attend trade shows, join associations and subscribe to trade journals; and speak to drone operators, drone suppliers, and manufacturers.
Consider taking a course on how to fly a drone. Check with your community college, some of which may offer non-credit courses to teach individuals to fly drones. This is a good way to build relationships with possible future customers.
Favorite success story?
From a small town just outside of Baltimore, we have been able to insure a variety of commercial drones all over the U.S. Using our website landing page, we have insured not only local companies, but also drones surveying land in Louisiana, insurance adjustors traveling to hurricane sites, and even drones on the West Coast involved in filming for the TV and entertainment industries.
AnneMarie McPherson is IA news editor.