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3. CU-24-52

What the form is

The CU 24 52 endorsement is designed for use with the Commercial Liability Umbrella (CU) Coverage Form. Its primary function is to provide limited Personal and Advertising Injury Liability (Coverage B) for exposures arising from the ownership, maintenance, use, or entrustment to others of specifically designated unmanned aircraft (drones). This coverage applies only to the unmanned aircraft and the operations or projects that are explicitly scheduled on the endorsement. Essentially, this form creates an exception to a broader exclusion for unmanned aircraft that would typically apply under the umbrella policy, but this exception is strictly limited to Coverage B and the details provided in the schedule.

Classes of business it applies to

This endorsement is relevant for a wide range of commercial insureds that utilize unmanned aircraft in their operations and carry a Commercial Liability Umbrella policy, especially when an underlying Commercial General Liability (CGL) policy has a corresponding endorsement (such as CG 24 52). Real-world examples include:

• Real estate agencies using drones for aerial property photography or videography.
• Construction companies employing drones for site surveys, progress monitoring, and inspections.
• Agricultural businesses utilizing drones for crop assessment, spraying, or mapping.
• Media, advertising, and entertainment companies using drones for filming or event coverage.
• Any business that might contract with third-party drone operators for services and seeks to ensure their umbrella policy provides this specific personal and advertising injury coverage related to those operations.

Special considerations

• Coverage B Limitation: It is critical to understand that this endorsement solely provides coverage for Personal and Advertising Injury Liability (Coverage B). It does not extend to Bodily Injury and Property Damage Liability (Coverage A) arising from unmanned aircraft operations. For Coverage A, a different endorsement like CU 24 51 would be necessary.
• Scheduling Requirement: Coverage is contingent upon the unmanned aircraft and the specific operations or projects being accurately and completely described in the endorsement's schedule. Any drone or operation not listed will likely remain subject to the umbrella policy's unmanned aircraft exclusion.
• Follow Form Principle: The CU 24 52 is intended to align with, or "follow form" to, a similar endorsement on the underlying CGL policy, such as the CG 24 52. The existence and terms of the underlying coverage are paramount.
• Interaction with Exclusions: This endorsement provides a specific buy-back of coverage within the context of broader unmanned aircraft exclusions (e.g., CU 21 71, CU 21 72, CU 21 73). It does not eliminate all unmanned aircraft exclusions but rather offers a limited exception for scheduled exposures under Coverage B.
• Potential for Sublimits: Agents and insureds should be aware that the underlying CGL endorsement (CG 24 52) might be subject to a sublimit aggregate, which could affect the amount of coverage available under the umbrella.

Key information for agents and underwriters

• Thorough Risk Assessment: Underwriters must meticulously evaluate the risks associated with the scheduled unmanned aircraft and their proposed uses. This includes considering the type and capabilities of the drone, the experience and training of the operators, the geographical areas of operation, and the adequacy of safety protocols.
• Verify Underlying Coverage: It is essential to confirm that appropriate underlying coverage for unmanned aircraft (e.g., CG 24 52) is in place and that its terms, conditions, and limits are compatible with this umbrella endorsement.
• Accurate Scheduling: Agents must work with insureds to ensure the schedule is precise and comprehensive, clearly identifying each designated unmanned aircraft and the specific project or operation for which Personal and Advertising Injury coverage is sought. Vague or incomplete schedules can lead to coverage gaps or disputes.
• Address Coverage Gaps: Agents have a responsibility to explain the specific scope of CU 24 52, particularly its limitation to Coverage B. If Bodily Injury or Property Damage (Coverage A) exposures related to drones are a concern, alternative or additional endorsements (such as CU 24 51 for Coverage A only, or CU 24 50 for both Coverage A and B) must be discussed and implemented if needed.
• Pricing Considerations: The premium for this endorsement should accurately reflect the specific exposure presented by the scheduled unmanned aircraft and operations. Factors influencing pricing include the number and types of drones, the nature and frequency of their use, operator qualifications, and any relevant loss history.
• Regulatory Awareness: While the insurance form itself does not enforce aviation regulations, underwriters may inquire about or require adherence to applicable laws and regulations governing drone operations (e.g., FAA Part 107 in the United States) as part of their risk assessment and underwriting guidelines.