However, because the UAS Operator agrees to assume that exposure under the contract, it does not obligate their insurer to assume those same exposures.
Before any coverage is provided under the policy for contractual liability, the Contractual Liability Exclusion must be removed from the policy through an endorsement sometimes an exclusion buy-back. The Contractual Liability Coverage Endorsement will outline the conditions under which the UAS Operator’s insurer will cover the contract and in no case will it cover liability arising from the sole negligence of the Customer or a contract between a UAS Operator and a contracted aircraft crew. Likewise, contractual liability coverage does not cover exposures that are not otherwise covered under the policy.
Following is an example
of the wording found
in a Contractual
Liability Coverage
Endorsement.
“Exclusion 9) a) of
the policy does not
apply to the
assumption by the
Named Insured of
the liability of others
for bodily injury or
property damage in
any contractual
agreement, provided
that the Named Insured
submits a copy of all such
agreements to the Company
within thirty days after coming to the attention of the Named lnsured’s Insurance Department, however, failure to do so through error or omission shall not prejudice the insurance afforded hereunder. The Company reserves the right to review and reject submitted contracts within ten (10) days and to charge an additional premium for any such agreement so submitted. The Company hereby waives the submission requirement with respect to temporary aircraft storage and minor servicing agreements, military or governmental agreements,
lease of premise
agreements and
agreements approved
by the Company
prior to the
effective
date of this
policy.
EXCLUSIONS
This insurance does not apply to liability assumed by the Insured:
(i) under any oral contract or agreement, nor
(ii) under any agreement or contract:
(a) with or for the benefit of passengers, crew, or their heirs;
(b) insofar as it pertains to major alterations or major repairs as defined in the Federal Aviation Regulations;
(c) with respect to the manufacture, sale, or servicing of any aircraft;
(d) entered into after the occurrence of a loss to which this endorsement applies”.
Most knowledgeable UAS specialty insurance brokers will
ensure that contractual
liability coverage
will be
sUAS Guide / Issue 2, July 2016 79