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Special considerations for insuring drones

Kate Browne brought her audience up to speed on drone basics at the Lowes Fund Breakfast held at the National Club in Toronto last month. But after explaining that drones can make 3D scans of construction sites and how there’ll be shorter times for claims resolutions, she asked the big questions, starting with: How are insurers going to make all of this work?

Browne can certainly answer some of them. She’s senior vice-president and claims counsel for Swiss Re Corporate Solutions in New York. “We’re going to need third party coverage in addition to our first party coverage… You are likely going to need special cyber consideration, in which case underwriters need to pay special attention to what kind of privacy protections are in place. What are you doing to make sure people’s postal codes and ID numbers are not being released and are not available to a potential hacker?”

And while Canada has been ahead of the U.S. in regulation, the risks keep multiplying and apply virtually everywhere. Browne brought up the issue of “spoofing, and that’s when you take someone’s GPS, and you send it a counterfeit signal, that the drone would then go someplace else. You could also buy a GPS jammer. They’re about $200 on eBay, and if you get a chance you can Google ‘the University of Texas, jamming,’ where two young engineering students are jamming the GPS on the drone, and they’re smashing it into the dean’s office, and they’re sending it all over the place, having a lot of fun.”

Actually, if you do Google, you’ll find a whole bunch of links going back years about University of Texas types hijacking and spoofing highly sophisticated equipment. Oh, those crazy madcaps in Austin.

Browne also pointed out that big companies like Amazon and Google are proposing a “superhighway” in which drones—all trackable, of course, and able to communicate with each other—would fly at different altitudes depending on their speeds, sizes and payloads. But as the event finished up, we asked Browne if this didn’t mean we could have a “poor man’s drone ceiling” while more powerful corporations would enjoy… well, the sky won’t be the limit—it’ll be how much sky you can buy.

“You’re absolutely correct,” replied Browne, “and that’s one of the criticisms of the Google/Amazon plan, is that it’s the haves and the have-mores, and the have-mores will get the better space. I mean, in the U.S., we’re moving very slowly and at the end, I don’t want to sound like a pessimist, but those with corporate money and resources will very likely get the good space, and the rest of the people will be left with the not-so-good space.”

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Copyright 2015 Rogers Publishing Ltd. This article first appeared in the December 2015 edition of Canadian Insurance Top Broker magazine