This is part three of a four-part series, on drones and their liability implications, shining light on the insurance market, navigating the noise, and ensuring that your operation is covered for the appropriate risks.
Last week, we discussed how knowing your underwriter, and seeking out expertise, clarity and empathy from the individual or company underwriting your risk can be a direct path to getting comprehensive coverage. This week, we discuss another avenue – seeking out a knowledgeable broker.
The role of a broker is to act on behalf of the insurer and the customer, using an in-depth knowledge of the insurance market and product offerings, an empathetic understanding of the coverage required, using that knowledge to provide comprehensive insurance coverage. For drones, the ability of a broker to bridge the gap between the new and rapidly advancing technology and associated regulation, provide sound and clear guidance on required coverage, and effectively manage the necessary relationships throughout the adoption and growth of drones within companies, large and small, is not only rare but also incredibly important.
What should a Drone Insurance broker know?
Because the fundamental role of the broker is to bridge between the insurance company and the insured party, the broker needs to be across a number of different areas, and have enough expertise to provide sound, effective advice to the client. While the context for a broker is highly specific, having a specific knowledge of the drone industry, the insurance suite of options, and using that expertise to educate and guide the client are skills that can mean the difference in getting adequate coverage and being exposed.
Technology, Legislation, Regulation
As we’ve been discussing over the course of the last two blog posts, Aviation is the most highly-regulated and legislated industry of almost all commercial industries. Because Drones are classed as such, an understanding of both the regulatory and legislative environment, and how insurance is crafted to meet these two, gives the broker the ability to provide clarity, and the power to make decisions in the best interest of the client.
As a corollary to regulation and legislation, the expansion of drone technology is continually providing new possibilities and applications. Keeping up to date with how the technology is evolving gives the broker an opportunity to have a unique perspective on the industry, better understand what companies are working with, provide more informed advice to their clients.
The suite of insurance options
It goes without saying that a broker needs to have an in-depth insurance knowledge. More than that however, an insurance broker is an individual who must be able to parse through highly technical nature of policy wordings, legislation and past precedence, and direct a prospective customer to the best possible solution for them. In order to achieve this effectively in the drone space, a broker needs to be aware of what each policy covers, how coverage differs, and how the policy responds in the event of a claim. Doing this means that the broker has a fundamental understanding of the individual clauses that make up the larger policy. Further to this, the broker must understand how a drone insurance policy might fit inside a larger organisation, such a consulting firm using drones, or a large mining company. That way the insurance coverage provided is not only covers all acceptable risks, but also fits in with the existing or overarching suite of insurances.
How to educate and provide clarity, throughout the policy
Similar to an underwriter, the goal of a broker is to have a keen understanding of the insurance process, boil down what is necessary and what isn’t, and to provide it to the customer at the best possible price. Whilst it is important to know the industry, and to know the suite of insurance options on the market, what separates the wheat from the chaff is the ability to translate that expertise and clearly and succinctly educate the customer, not only when the sale is made but throughout the policy. Some key questions when considering a broker might be – Will my broker care enough to answer my call when I need to get approval for my expanded drone operation, such as powerline inspection, or consulting? I'm not sure about how this regulation affects me, can my broker provide some clarity on this? Can my broker help me through a claim? I think I need to raise/lower my liability limit, will my broker go and do this for me?
Whilst a broker’s role is to provide the service of putting the correct insurance in place of the client, a broker who will go beyond that, provide guidance the dynamic nature of the drone industry, and give ongoing support is worth their weight in gold. Having a broker of that nature in place is a key strategy in mitigating risks in your drone operation.