In the process of setting up an LLC for my drone business. Planning to have drone insurance, but also wondering if I need any other type of liability insurance for the business. I own a marketing firm and we have all sorts of insurance policies, but I'm hoping to keep things fairly simple for this venture. I'm not sure if I'm going to make much money, so I don't want to jump off the deep end with startup costs. Any feedback would be appreciated.
Insurance Question
- Thread starter NJGlover
- Start date
You can purchase it per flight. Check out Skywatch or one of the many other drone insurance companies.
I've been assuming I would have "Drone Insurance" like Skywatch, but I guess I'm wondering if that is enough? Do I need General Liability with Errors and Omissions coverage? My plan is to shoot real estate photography and maybe an occasional video project for another company that doesn't have a part 107 pilot on staff. I might not even be flying since they have their own drone, but I'd act as the Pilot-In-Command. I'm hesitant to talk to my insurance guy because he's going to tell me I need it all and then some because he sells insurance after all. I got my part 107 in case I found an opportunity to fly commercially. I just don't want to have more expenses than profit. I'm flying a Mavic Pro1 at this point, but hope to upgrade if I can get enough business to justify it.
I’d think you’d base this decision on your sense of what your liability is when you’re not flying.
This also goes for auto insurance, individual or business.
Can you add drone operations to your marketing firm’s business, so you’re not paying twice?
This also goes for auto insurance, individual or business.
Can you add drone operations to your marketing firm’s business, so you’re not paying twice?
I have a business partner and yes, we can add drone work to the company, but real estate work is not lucrative enough for me to bring it in-house. I would fly for the right project within the company, but most of what I think is out there is really small jobs. We do medical education video and the occasional patient story. Drone footage in an operating room is not practical, but showing a patient with new knees on the golf course is perfect. I guess what I’m saying is, this is a side gig that I might occasionally do for my day job.
As far as liability when I’m not flying, I can imagine all sorts of possible scenarios where someone might come after me, but they’d really only get a couple of Mavic Pro1’s and some batteries. As long as the LLC protects my personal assets I can lose the gear. I guess that is the question. When can they take my savings and my home? Under what conditions does the LLC break down?
As far as liability when I’m not flying, I can imagine all sorts of possible scenarios where someone might come after me, but they’d really only get a couple of Mavic Pro1’s and some batteries. As long as the LLC protects my personal assets I can lose the gear. I guess that is the question. When can they take my savings and my home? Under what conditions does the LLC break down?
Do you have an umbrella policy? For $280/yr I have $1M in protection. I am not an insurance expert, but my financial advisor has told me that this covers every manner of liability that my other policies don’t cover. Perhaps this is different for a commercial endeavor, so I would check further.
I'm particularly interested in the "Errors and Omissions" aspect of this.
With auto liability coverage in the USA. E&O is baked in. If you ding somebody up, the insurances pays, regardless of what you may or many not have done in an E&O sense. Subject to the policy limits, of course. I don't think it's possible to buy auto liability insurance *without* the E&O baked in, and have it satisfy the state liability insurance requirements.
I assumed drone liability insurance would be the same way, without thinking about it, but apparently it isn't.
I definitely want the liability insurance for Savage Drones to have E&O baked in. I put off my insurance research when it was clear that I wouldn't be flying commercially for a while, but now, that's getting much closer.
Do any of you have drone liability insurance that has the E&O baked in, that you like? If so, what specific company did you use?
Thx!
TCS
Respectfully, that’s a question for an attorney. Would you really want to depend on the advice of a semi-random person on the forum?
Granted, there are a few working commercial pilots on this forum. Are the LLC liability exposures the same in your state as theirs?
I must respectfully disagree with this.
A reference from someone here to a specific company that does what I'm looking for, that they like, is a good starting point.
It doesn't mean that I'd abdicate my responsibility to check out any specific recommended company, but it would be a place to start. In my experience, having a pointer to a place to start is vastly superior to a "cold" web search.
Thx,
TCS
@Chaosrider, if you’ll read what I quoted above, my response was specifically about the question as to how exposed to liability the OP might be *with* an LLC.
Basically, I’m saying that how an LLC protects someone under different circumstances may vary from state to state in the US, and this *is* a matter one should be sure about.
So, I’m not sure what you’re disagreeing with. Insurance is good. References for insurance companies to check out are good. Legal advice from an internet forum? Not so good, in my opinion.
Ah, my mistake, and my apologies. I did indeed misread what you wrote.
Sorry about that!
TCS
As anyone who has ever paid insurance for years and never needed it, would tell you it sucks laying out that money. But the second you need it, it’s WORTH EVERY PENNY!
Even though you have some protections via the LLC, and you feel you could justify the loss of a couple airframes and the contents of the bank account, the civil litigation cost to get the judgment against you settled would probably FAR exceed the cost of a basic $1M general liability policy.
With the general liability policy you can hope the insurance payout will appease anyone coming after you, reducing the need for an attorney.
Just food for thought.
Even though you have some protections via the LLC, and you feel you could justify the loss of a couple airframes and the contents of the bank account, the civil litigation cost to get the judgment against you settled would probably FAR exceed the cost of a basic $1M general liability policy.
With the general liability policy you can hope the insurance payout will appease anyone coming after you, reducing the need for an attorney.
Just food for thought.
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If you are going to fly for business I recommend you have a small business policy, which will help cover your equipment for theft/damage along with liability. I also have a monthly plan with SkyWatch.ai and I have DJI refresh since that deductible is lower and the least expensive hull coverage, providing you find your craft.
As you shop, be sure that the coverage extends to another persons' drone and/or another person at the control. As PIC you are responsible, yet as I shop for insurance tonight, at least one policy states that each "pilot" must have their own policy. What happens if you are PIC and the person at the control, with their drone, hits a manned aircraft? Also, that I must list the aircraft that I own and operate. How will they define "pilot." Caveat emptor.
The drone insurance market is immature, and poorly developed, with few options and even fewer good options.
Hopefully that situation will improve as droning becomes more popular.
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