are you ready for the changes in aviation insurance coverage? · unlike auto insurance – uav...
TRANSCRIPT
STRIMA, Madison, WI September 23, 2015
Are you ready for the changes in Aviation Insurance Coverage?
Julian Davies – SVP Willis Aerospace
Carson Lyons – VP AIG Aerospace
Now may be a good time to re-evaluate your Aviation
Exposures
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Who we are?
Julian Davies Willis Aerospace – Americas Senior Vice President Base: Los Angeles, California
Carson Lyons AIG Aerospace Services Vice President Base: Atlanta, Georgia
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Exposure Evolution: Manned vs Unmanned?
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Insured Customer
Aviation Insurance Carriers (US)
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Main Classes of Coverage
Manned Aircraft Hull and/or Liability
Aviation General Liability/Airport Liability
Non-owned Aircraft Liability
Unmanned Aircraft Hull and/or Liability
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Manned Aircraft Hull & Liability
Basic coverage elements
Aircraft Hull Physical Damage
Aircraft Spare Parts & Equipment
Aircraft Liability
Medical Expenses
Premises Liability
Non-owned or replacement aircraft extension
Pilot Warranties / Geographical Limitations
Coverage Options
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General/Airport Liability
Basic Coverage elements:
Third Party Bodily Injury or Property Damage
– Airside exposures Ground Handling/Refuelling/Construction Liability/ATC – Non-airside exposures Buildings/Terminals (Shops/Restaurants/Parking lots)
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Non-owned Aircraft Liability
Basic Coverage elements
Non-owned aircraft Liability
Why, When, What & Who
Coverage Extensions
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Aircraft Insurance Risks
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Airport Insurance Risks
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Market Forces – How it impacts you?
UAV Exposures and Coverages for State Government Entities 2015 STRIMA Educational Conference
September 23, 2015 Madison, WI
Carson Lyons, VP-GPLM, General Aviation
AIG Aerospace
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Disclaimer
Certain statements provided herein are based solely on the opinions of AIG and are being provided for general information purposes only. Any opinions provided on economic trends should not be relied upon for investment decisions and are solely the opinion of AIG.
Certain information may be based on information received from sources AIG considers reliable; AIG does not represent that such information is accurate or complete. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein are valid only as of the date of this document and are subject to change. AIG is not soliciting or recommending any action based on any information in this document.
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Table of Contents/Agenda
Who needs to have insurance? Nobody and Everybody!
Regulations (333 Exemptions/COAs) and insurance
General UAV operational exposures & coverages
BUYing UAV Insurance: What is the process to get it in place?
Questions?
Who Needs Insurance? Nobody and Everbody?
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Who Needs Insurance?
Unlike auto insurance – UAV insurance ISN’T compulsory (at least for now).
No requirement for insurance included within the FAA’s NPRM.
Commercial UAS Modernization Act introduced to U.S. Senate on 12 May would require liability insurance, but may or may not move ahead.
Nobody
Exposures DO exist for every UAS operator.
Already have seen customers of UAV operators requiring “proof of insurance.”
Your first/next accident could lead to a lawsuit.
Everybody
Nobody and Everybody!
Regulations (333 Exemptions/CoAs) and Insurance
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Regulations and Insurance
FAA Approval Options: 333 Exemptions and COAs – Most State owned UAVs will be considered “Public Aircraft” – COAs applicable to most State UAV operations (https://www.faa.gov/uas/public_operations/)
There is a wide ranging insurance industry response to 333 Exemptions and CoAs.
Insurance is available for nearly any UAS operator in the market – 333/CoA holder or not.
Wide number of carriers involved, some with aviation experience, others without.
Policies differ in wording and how illegal operations may, or may not, be addressed.
Beyond FAA operational authority, insurance carriers often develop their own standards for what acceptable risks are. Frequently, these may exceed FAA minimums.
Insurance and UAS industries are really still getting to know each other in many respects.
333 Exemptions & COAs
General UAS Operational Exposures & Coverages
“The first step in the risk management process is to acknowledge the reality of risk.” - Charles Tremper
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Liability
TRADITIONAL AVIATION EXPOSURES
Bodily injury and property damage
Consequential losses
Catastrophic loss potential
Non-owned use of unmanned aircraft
Personal Injury
NON-TRADITIONAL AVIATION EXPOSURES
Errors & Omissions/Professional Liability
Cyber
Exposures
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Privacy
Unreasonable searches/surveillance
Trespassing
Invasion of privacy – Intrusion upon seclusion – Publication of private facts
Stalking and harassment
Business privacy
February 2015 Presidential Memorandum released from White House – Established Executive Branch multi-stakeholder process to establish best practices for commercial use of UAS
Most UAV-related legislative efforts nationally are tied to restricting UAV use by government agencies.
Eight states have adopted some legislation in 2015, another 15 have legislation pending, while Eight enacted laws in 2013 or 2014 (as of 8/14/15).
45 states have considered more than 150 drone-related bills just this year according to the National Conference of State Legislatures.
California SB 142 – passed by CA Legislature on Aug. 28, vetoed by Gov. Brown on Sept. 9
Exposures
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Physical Damage
Aircraft
Payload
Ground control equipment
Spare parts
Exposures
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War
Unmanned aircraft can face war risks – Malicious attack – Hi-jacking – Spoofing – Sabotage
Very different exposure potential than what we are used to as aviation underwriters
Coverage can be considered, but only on a case by case basis, and may not be available from all carriers.
Exposures
BUYing UAV Insurance What is the process for getting coverage in place?
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BUYing UAV Insurance
Broker – They work for you and strive to find the best coverage options available by accessing multiple
insurance markets on your behalf.
Underwriter – Works for the insurance company itself and reviews information provided by the broker to
determine coverage availability and policy pricing.
You and the State Departments and Universities you Serve – The information you provide to your broker, and the relationship you develop with him or her (and
in some cases even your underwriter) can be the key to a successful placement. No one knows your State’s operations better than you/they.
– Ask about UAV operations and pass along that information.
The Three Key Players
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Underwriting Considerations
Almost all aviation underwriting stems from four basic points of risk analysis. – Operator experience – Make and model information – Purpose of Use – Location of Operations
Values and limits required – Aircraft – Payload – Ground Equipment
Operational procedures/risk mitigation items
Training
UAV underwriting is based on traditional aircraft underwriting foundation
Questions?
The data contained in this presentation are for general informational purposes only. The advice of a professional insurance broker and counsel should always be obtained before purchasing any insurance product or service. The information contained herein has been compiled from sources believed to be reliable. No warranty, guarantee, or representation, either expressed or implied, is made as to the correctness or sufficiency of any representation contained herein.
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