1. Forms
2. CU
3. CU-21-71

What the form is

The CU 21 71 is an endorsement to a Commercial Umbrella liability policy. Its primary function is to exclude coverage for liabilities arising from the ownership, maintenance, use, or entrustment to others of any "unmanned aircraft" (commonly known as drones). Specifically, this endorsement modifies the umbrella policy to eliminate coverage for Bodily Injury and Property Damage Liability (Coverage A) as well as Personal and Advertising Injury Liability (Coverage B) that are connected to unmanned aircraft. The form typically includes a definition of "unmanned aircraft" to clarify the scope of the exclusion.

Classes of business it applies to

This endorsement can be applied to virtually any business that carries a Commercial Umbrella policy where the insurer wishes to exclude exposures related to unmanned aircraft. Examples of businesses where this might be particularly relevant include:

• Construction companies: Using drones for site surveys, inspections, or monitoring progress.
• Real estate agencies: Employing drones for aerial photography and videography of properties.
• Agricultural operations: Utilizing drones for crop dusting, field monitoring, or livestock management.
• Media and entertainment companies: Using drones for filming, news gathering, or event coverage.
• Retail or delivery services: Experimenting with or using drones for delivery purposes.
• Any business whose employees or contractors might use drones in connection with their operations, even if not a primary activity.

Special considerations

• Alignment with Underlying Policies: This endorsement is often used to ensure the umbrella policy's coverage is consistent with the underlying Commercial General Liability (CGL) policy, especially if the CGL contains a similar unmanned aircraft exclusion (e.g., ISO form CG 21 09). This prevents situations where the umbrella might inadvertently provide coverage that was intentionally excluded at the primary level.
• Definition of "Unmanned Aircraft": The specific definition of "unmanned aircraft" within the endorsement is critical. It will dictate what types and uses of drones fall under the exclusion.
• Coverage Gaps: Businesses that rely on or frequently use drones will face a significant coverage gap for drone-related liabilities under their umbrella policy if this endorsement is attached. They will likely need to procure specialized aviation or drone insurance to cover these exposures.
• No Follow-Form for Underlying Drone Coverage: Unlike some other endorsements (e.g., CU 21 75), the CU 21 71 is a broad exclusion and generally does not provide an exception to follow form if the underlying policy happens to provide some coverage for unmanned aircraft.

Key information for agents and underwriters

• For Agents: It is crucial to clearly explain the impact of this exclusion to insureds, particularly those known to use or considering the use of drones. Agents should discuss the resulting coverage gap and advise on the potential need for separate, specialized drone insurance. Documenting this conversation is advisable.
• For Underwriters:
  • Risk Management: The CU 21 71 is a tool to manage the unique and evolving liability risks associated with drone operations, which can include property damage from crashes, bodily injury to third parties, and privacy violations.
  • Pricing and Exposure: By attaching this exclusion, underwriters can avoid taking on the often difficult-to-quantify risks of drone liability within a standard umbrella premium. If an insured requires umbrella coverage for drones, this would necessitate removing or modifying such an exclusion and would likely involve significant additional underwriting scrutiny and premium.
  • Consistency: Underwriters should aim for consistency between the umbrella and underlying CGL policy regarding drone exposures. If the CGL excludes drones, the CU 21 71 helps maintain that stance at the umbrella level.
  • Underwriting Guidelines: Even with this exclusion in place for the umbrella, underwriters should still inquire about an insured's drone usage as it may indicate other risk factors or the need for specific safety protocols, even if those drone activities are intended to be covered elsewhere.