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3. CU-24-51

What the Form Is

The CU 24 51 is an endorsement to an ISO Commercial Liability Umbrella Coverage Form. Its primary purpose is to provide limited Bodily Injury and Property Damage Liability (Coverage A) for "unmanned aircraft" (commonly known as drones) that are specifically listed (scheduled) on the endorsement. It modifies the standard aircraft exclusion typically found in liability policies, which would otherwise preclude coverage for drone-related incidents. This endorsement essentially carves out an exception to that exclusion for the designated unmanned aircraft and their specified operations or projects.

Classes of Business It Applies To

This endorsement is relevant for any commercial insured that utilizes drones in their operations and carries a Commercial Liability Umbrella policy. Examples of businesses that might use this endorsement include:

• Construction Companies: Using drones for site surveys, progress monitoring, or inspections.
• Real Estate Agencies: Employing drones for aerial photography and videography of properties.
• Agricultural Businesses: Utilizing drones for crop dusting, field mapping, or livestock monitoring.
• Photography/Videography Businesses: Offering drone-based services for events, marketing, or film production.
• Engineering and Surveying Firms: Using drones for land surveying and infrastructure inspection.
• Any business that has the corresponding CG 24 51 endorsement on their underlying Commercial General Liability policy and wishes to extend similar coverage to their umbrella layer.

Special Considerations

• Scheduled Aircraft and Operations: Coverage only applies to the specific unmanned aircraft and the precise operations or projects detailed in the endorsement's schedule. Any drone or operation not listed is likely not covered by this endorsement.
• Coverage A Only: This endorsement specifically provides coverage for Bodily Injury and Property Damage Liability. It does not provide coverage for Personal and Advertising Injury Liability (Coverage B) which would require a different endorsement (e.g., CU 24 52 or CU 24 50).
• Underlying Coverage Prerequisite: It is generally intended to be used when the insured's underlying Commercial General Liability (CGL) policy has the corresponding CG 24 51 endorsement attached. The umbrella coverage provided by CU 24 51 would then sit excess of the CGL coverage for drones.
• Aggregate Limit: The endorsement typically introduces a separate aggregate limit specifically for liability arising from the designated unmanned aircraft. This limit is part of, and not in addition to, the overall aggregate limits of the umbrella policy.
• Definition of "Unmanned Aircraft": The policy will contain a specific definition of "unmanned aircraft". Generally, this refers to an aircraft that is not designed, manufactured, or modified after manufacture to be controlled directly by a person from within or on the aircraft.

Key Information for Agents and Underwriters

• Risk Assessment: A thorough evaluation of the insured's drone operations is critical. This includes the types and specifications of drones used, the qualifications and training of the operators, the nature and location of the flight operations (e.g., urban vs. rural, altitude, proximity to public), and safety protocols in place.
• Accurate Scheduling: Agents must work closely with insureds to ensure the Schedule in the endorsement accurately and comprehensively lists each designated unmanned aircraft (e.g., by make, model, serial number) and clearly describes the specific operations or projects for which coverage is intended. Ambiguity can lead to coverage disputes.
• Coordination with Underlying Policy: Underwriters should verify that the underlying CGL policy includes the CG 24 51 endorsement and that the limits are appropriate. The CU 24 51 is designed to follow the underlying coverage for scheduled drones.
• Pricing and Limits: The premium for this endorsement will depend on the assessed risk and the requested aggregate limit for unmanned aircraft. Underwriters need to determine if the standard umbrella limits or a specific sub-limit for drone operations is appropriate.
• Coverage Gaps: Agents should counsel insureds on potential coverage gaps. For example, this endorsement does not cover physical damage to the drone itself (which would require separate inland marine or aviation coverage) nor does it cover non-scheduled aircraft or operations.
• Regulatory Compliance: While the insurance form provides coverage, agents should remind insureds of the importance of complying with all applicable FAA (or other relevant aviation authority) regulations for operating unmanned aircraft. Non-compliance could potentially impact coverage.