Association Adds Drone Insurance for Farmers
Many businesses and industries will be affected by the Federal Aviation Administration’s small drone regulations that go into effect next week. The American Association of Insurance Services is doing its part to ensure farms and agricultural businesses using the technology are covered by drone insurance.
With the Federal Aviation Administration’s small drone regulations to take effect next week, the American Association of Insurance Services is filing new drone insurance coverage forms and rules for the fastest-growing industry using the technology: farms and agribusiness.
Already approved by 35 state departments of insurance, the Unmanned Aircraft Liability Coverage forms and rules are being added to AAIS’s Agricultural General Liability Program.
“As an industry leader in the farming and agriculture sector, we anticipated the need our members would have and their demand has been great,” AAIS VP of Commercial Lines, Farm, and Agribusiness Leslie Rippley said in a statement. “Thus, our first filing for Agricultural General Liability Unmanned Aircraft coverage offers large commercial farm and agricultural operations a solution tailored to their more complex exposures.”
AAIS is an advisory group that designs standardized insurance policy forms and rating information, which it gets approved by states. Once approved, this information is passed along to AAIS member companies, who can then offer the policies to their clients.
Currently, most insurance policies exclude aircraft—including drones. With these new forms and rules, insurance companies can now offer policies to commercial agriculture operations that specifically cover unmanned aircraft.
“These forms represent a variety of solutions for an insurance company to specifically cover the liability exposure that drones present or specifically exclude those exposures that the use of drones would represent,” Rippley told Associations Now.
At the request of its member companies, AAIS filed the new forms and rules in July. “Our customers, primarily being insurance companies, are seeing the expansion and the emergence of drones being used in their communities, and their policyholders, as well as their insurance agents, asking for products that they can offer to consumers,” she said.
The FAA’s regulations, which establish certificate guidelines and age restrictions for piloting drones, go into effect on August 29. Although the soon-to-roll-out rules only apply to small unmanned aircraft under 55 pounds, AAIS’s forms and rules will not have a weight limit.
“We deliberately did not include the size limitations that would be eligible for this program, because we wanted to provide the flexibility to our insurance company customers to determine how large of a drone they would be willing to insure,” Rippley said.
The agribusiness industry has increasingly used drones, as they allow farmers to more efficiently monitor livestock, check for irrigation problems and insect infestations, or perform other tasks to ensure healthy crops.
Following the introduction of policies for commercial agriculture, AAIS will add drone policies to its product lines for small farmers, which will include coverage for damage, and to its programs for business owners and artisan contractors. And as more data on drone use—other than for military purposes—is gathered, the organization will also draw up policies relating to drone loss costs.