1. Forms
2. IH
3. IH-00-61

What the form is

The IH 00 61 Unmanned Aircraft Property And Cargo Coverage Form is an Insurance Services Office (ISO) Commercial Inland Marine form. Its primary purpose is to provide direct physical loss or damage coverage for scheduled unmanned aircraft (drones), including their essential operating equipment and any data generated as part of their operations, along with the electronic media on which such data is processed, recorded, or stored. The form also offers options to cover cargo owned by the insured or cargo belonging to others that is being transported by the insured's unmanned aircraft, if indicated in the declarations. This coverage was introduced to address the risks associated with the rapidly expanding commercial use of drones.

Classes of business it applies to

This form is suitable for a wide range of businesses that utilize unmanned aircraft in their operations. Real-world examples include:

• Real Estate Agencies: Using drones for aerial photography and videography of properties for sale.
• Construction Companies: Employing drones for site surveys, progress monitoring, and inspections of structures.
• Agricultural Businesses: Utilizing drones for crop monitoring, field mapping, and precision agriculture.
• Photography and Videography Services: Offering drone-based aerial imaging for events, filmmaking, or commercial advertisements.
• Delivery and Logistics Companies: Exploring or using drones for transporting goods.
• Surveying and Mapping Firms: Using drones for topographical surveys and cartography.
• Insurance Companies: Using drones for claims adjusting, particularly for property inspections in hard-to-reach areas.
• Public Safety and Emergency Services: (While this is a commercial form, some private entities supporting these services might use it) For search and rescue operations or disaster site assessment.

Special considerations

Several important factors should be considered when using this form:

• Accurate Description of Operations: The declarations page (IH DS 61) requires a precise description of the unmanned aircraft operations. Coverage for the aircraft while in flight is often contingent upon it performing these specifically described operations.
• Property vs. Liability: This form provides property coverage for the drone and its cargo. It does not cover liability exposures (e.g., bodily injury or property damage caused by the drone to third parties). Separate liability coverage is essential.
• FAA Regulations: Compliance with all applicable Federal Aviation Administration (FAA) regulations is crucial. This includes rules regarding aircraft weight (typically under 55 pounds), operating within visual line of sight, not flying over people, airspace restrictions, remote pilot certification, and time-of-day restrictions. Non-compliance could potentially jeopardize coverage.
• Scheduled vs. Blanket Coverage: Unmanned aircraft are typically scheduled on the form, though options for blanket coverage for certain equipment might exist.
• Valuation: The basis of valuation for the unmanned aircraft and any covered cargo (e.g., Actual Cash Value or Replacement Cost) should be clearly established in the policy.
• Data Coverage: A key feature is the coverage for data generated by the drone and the electronic media it's stored on, which can be valuable.
• Exclusions: Policyholders should carefully review all exclusions, which might pertain to specific types of use (e.g., illegal activities), wear and tear, or electronic malfunctions not caused by a covered peril.

Key information for agents and underwriters

Agents and underwriters should focus on the following practical aspects:

• Thorough Risk Assessment: Gain a comprehensive understanding of the insured's drone operations. This includes the types and values of drones used, the qualifications and experience of the remote pilots (including FAA certification), the geographical areas of operation, typical flight altitudes and durations, safety protocols in place, and the specific purposes for which the drones are used.
• Identify Coverage Gaps: Clearly explain to clients that IH 00 61 covers physical damage to the drone and cargo only. Proactively discuss the need for separate Unmanned Aircraft Liability insurance to cover third-party bodily injury and property damage.
• Pricing Considerations: Premiums will be influenced by factors such as the value of the scheduled aircraft and associated equipment, the nature and perceived risk of the described operations (e.g., flights over water or congested areas may carry higher risk), loss history, pilot expertise, and the limits and deductibles chosen.
• Underwriting Guidelines: The underwriter's primary focus should be on the detailed description of unmanned aircraft operations provided in the declarations. Assess the risks associated with these specific uses. Consider the insured's adherence to FAA regulations and their overall risk management practices concerning drone operations.
• Cargo Coverage Details: If cargo coverage is requested, determine whether it is for cargo owned by the insured or cargo of others in the insured's care, custody, or control, as distinct coverage provisions apply. The nature and value of the cargo are also important underwriting considerations.
• Review Declarations (IH DS 61): Ensure the Unmanned Aircraft Property and Cargo Declarations (IH DS 61) is completed accurately and comprehensively, as it forms a critical part of the coverage.