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3. CU-24-50

What the form is

The CU 24 50 is an endorsement to the ISO Commercial Liability Umbrella Coverage Form (CU 00 01). Its primary function is to provide limited liability coverage for 'bodily injury,' 'property damage,' and 'personal and advertising injury' that arises specifically from the ownership, maintenance, or use of designated (scheduled) unmanned aircraft, commonly known as drones. This coverage applies only to the unmanned aircraft and the specific operations or projects that are explicitly described in the endorsement's schedule. Essentially, this endorsement carves back coverage that would typically be excluded by the standard aircraft exclusion found in the umbrella policy for these scheduled drone exposures.

Classes of business it applies to

This endorsement is pertinent for any commercial insured that utilizes drones in its operations and seeks umbrella liability coverage for these specific exposures. Real-world examples include:

• Construction companies: Using drones for tasks like site surveys, progress monitoring, or inspections.
• Real estate agencies: Employing drones for aerial photography and videography of properties.
• Agricultural businesses: Utilizing drones for crop monitoring, spraying, or mapping.
• Media and entertainment companies: Using drones for filming, event coverage, or news gathering.
• Energy sector: Using drones for inspecting pipelines, power lines, or other infrastructure.
• Public entities: Using drones for surveillance, emergency response, or land management.
• Any business that contracts with third-party drone operators where the named insured might still incur liability.

Special considerations

• Scheduled Operations Only: Coverage is strictly limited to the unmanned aircraft and the operations or projects specifically detailed in the endorsement's schedule. Any drone or operation not listed remains subject to the standard aircraft exclusion.
• Accurate Scheduling: It is critical for the insured to accurately and comprehensively list all designated unmanned aircraft and their intended uses in the schedule.
• Underlying Coverage Alignment: This endorsement is designed to be used when the corresponding Commercial General Liability (CGL) endorsement, CG 24 50 Limited Coverage For Designated Unmanned Aircraft, is attached to the underlying CGL policy. This ensures consistency of coverage between the primary and umbrella layers.
• Potential Sublimits: Agents should ascertain if the underlying CG 24 50 is subject to a sublimit aggregate, as this could affect the amount of coverage available under the umbrella policy.
• Scope of Coverage: The CU 24 50 provides coverage for both Coverage A (Bodily Injury and Property Damage Liability) and Coverage B (Personal and Advertising Injury Liability) of the umbrella policy, as it pertains to the scheduled unmanned aircraft.

Key information for agents and underwriters

• Risk Assessment: Underwriters must thoroughly evaluate the specific risks associated with the insured's drone operations. This includes the types and sizes of drones, the qualifications and experience of the operators, the nature and location of the projects (e.g., urban vs. rural, proximity to airports or crowds), and the insured's safety protocols and compliance with FAA regulations.
• Pricing Considerations: The premium for this endorsement will be influenced by the assessed risk. Higher-risk operations (e.g., large drones, operations over populated areas, inexperienced operators) will likely command higher premiums.
• Identifying Coverage Gaps: Agents should clearly explain to insureds that coverage only applies to scheduled aircraft and operations. Any deviation or use of unscheduled drones could result in a coverage denial.
• Underlying Policy Review: It's crucial to confirm that the underlying CGL policy has the appropriate drone coverage (e.g., CG 24 50) and that its limits are adequate. The umbrella policy generally follows the terms and conditions of the underlying insurance.
• Exclusionary Context: Understand that this endorsement modifies the broader aircraft exclusion typically found in the Commercial Liability Umbrella Coverage Form (CU 00 01). For exposures not covered by this endorsement, the aircraft exclusion will likely still apply.
• Alternative Endorsements: ISO offers a suite of endorsements related to unmanned aircraft, including options for BI/PD only (CU 24 51), P&AI only (CU 24 52), or broader exclusions (e.g., CU 21 71 Exclusion – Unmanned Aircraft). The most appropriate endorsement depends on the insured's specific needs and the underwriter's risk appetite.