America’s burgeoning drone industry is being threatened by liability risks

Last month, the Federal Aviation Administration approved its 1,000th commercial drone permit, 998 more than it granted last year at this time.

For many in the nascent commercial drone industry, that momentum bodes well for an industry expected to generate billions of dollars in economic impact over the next ten years, particularly after a more cohesive set of commercial drone regulations is put in place by the FAA next year. But as commercial drones move toward ubiquity, the industry still faces a major obstacle in assessing and appraising drone-related liability and adequately insuring both drones and the companies that use them.

“You’ve got this new emerging industry and there’s a lot of regulatory uncertainty and there’s a lot of companies with liability concerns,” says Lisa Ellman, a drone policy expert and co-chair of the Unmanned Aircraft Systems Group at the Washington D.C. offices of law firm Hogan Lovells. “Liability tends to be the first thing that comes to mind for someone developing a new business.”

A report released last month by UK insurance house Lloyd’s details just how challenging insuring the drone industry may become in the years ahead. The report cites “patchy regulatory regimes” and “poor enforcement” among the key risks facing the drone industry—risks that exist beyond the control of drone manufacturers or operators themselves.

Pricing risk in the absence of strong regulatory frameworks and enforcement mechanisms could prove troublesome, the report says. And, that’s before you delve into issues like third-party liability for a technology where risks range from broken windows or roof damage to major aviation catastrophes.

All of this grows increasingly important in the U.S. as the Federal Aviation Administration moves closer to issuing a brand new set of broad commercial drone regulations. Those regulations could go a long way towards helping insurers price risk in the commercial drone space.

The industry expects those regulations to make it much easier for companies and individuals to operate drones for commercial purposes, potentially putting thousands upon thousands of new unmanned aircraft into U.S. skies. This new development could leave insurers scrambling to figure out how to effectively (and fairly) cover drone risk in an emerging market that offers little meaningful data and risk metrics.

“Unfortunately, there are big questions and not enough answers,” says Tom Karol, a general counsel for the National Association of Mutual Insurance Companies (NAMIC). “There needs to be more clarity on how people will use these, and what will be allowed and won’t be allowed is a big issue.”

U.S. insurers and regulators do have some insurance models they can use as examples when crafting legal and policy rules. The European Union has turned to a page in its larger civil aviation code to require that drones larger than 20 kilograms, or roughly 44 pounds, meet a minimum third-party liability requirement based on the mass of the aircraft (though given that many drones weigh in at far less than 20 kilograms, the regulation stops short of being an insurance mandate).

Transport Canada, the country’s civil aviation authority, has gone one step further. While authorities there have eased some restrictions on commercial drones, they also require professional drone operators to obtain $100,000 in liability insurance for drones of any size. This unusual requirement likely serves to keep some less-than-professional pilots from taking to the sky for commercial purposes, but it’s not yet clear if (or how such) a requirement might impact Canada’s commercial drone industry.

Recent reports of “close calls” between drones and commercial aviation in the U.S. (as well as a rash of incidents in which drones have crashed into crowds at sporting events) have only served to heighten awareness of drone-related risks. Drone service companies like Measurehave emerged as firewalls between companies and potential drone risks, providing proper regulatory permits, experienced pilots, and a liability buffer between clients and the drone operators.

However, until the insurance industry and regulators can figure out a fair and consistent way of insuring both drone service companies and businesses that operate drones themselves, the U.S. commercial drone industry could find itself unable to take off even after the FAA issues its final commercial drone regulations next year, Ellman says. “The insurance industry itself is grappling with a lot of these issues, and how all this plays out is integral for the future of the industry.”

Progressive Insurance to test mobile app version of Snapshot device

Progressive Insurance is getting ready to begin a test of the mobile app version of its Snapshot device.

The Mayfield Village-based insurance giant announced the mobile app pilot will launch in mid-September “with select customers across the country.” It said a Boston company, Censio, is developing the software for the app, which will “automatically monitor and measure drivers’ data — such as time of day, mileage and hard braking — to potentially earn a discount on auto insurance through Progressive’s program.”

At the end of each trip, Progressive said, “the mobile app will give drivers personalized information, including a one to five star rating, a data summary, a map of their drive, and tailored driving tips, to help them improve their score.”

New Snapshot customers will have the option to use either the Snapshot app, available for both iOS and Android operating systems, or the traditional telematics device, Progressive said.

Last year, Censio won a competition Progressive held with 11 companies to create the app. Following the customer pilot this year, Progressive and Censio “will apply learnings and real customer feedback to the final app, which will come to market starting in 2016,” according to the release.

 Since introducing the device in 2008, Progressive said, it has collected more than 14 billion miles of driving data.

GEICO teams on standby for Hurricane Ignacio

HONOLULU–(BUSINESS WIRE)–GEICO’s Catastrophe Response (CAT) Team, which includes auto damage adjusters, is on standby waiting to assist the local community and policyholders in the event that Hurricane Ignacio makes landfall in Hawaii.

“GEICO will be reaching out to the public on TV, local radio and social media so residents receive the most current claims information affecting their area.”

GEICO urges policyholders to report any losses as early as possible on the GEICO mobile app, or by logging onto GEICO’s Claims Center or calling 1-800-841-3000.

Commercial vehicle policyholders can file a claim by calling 1-866-509-9444. Claims can be filed as soon as storm damage affects property, and the claims will be processed immediately and resolved as quickly as possible.

Tim Dayton, head of GEICO’s operations in Hawaii, urges policyholders to take the necessary steps to protect their families and to follow the directions of local officials. In addition, GEICO.com features severe weather safe driving tips as well as links to trusted weather and disaster preparedness resources.

GEICO officials say that additional information is available at GEICO’s online Catastrophe Center with preparedness tips, links to other important hurricane information and weather sites, and immediate claims handling capabilities.

Adds Dayton, “GEICO will be reaching out to the public on TV, local radio and social media so residents receive the most current claims information affecting their area.”

GEICO (Government Employees Insurance Company) is a member of the Berkshire Hathaway family of companies and is the second-largest private passenger auto insurance company in the United States. GEICO, which was founded in 1936, provides millions of auto insurance quotes to U.S. drivers annually. The company is pleased to serve more than 13 million private passenger customers, insuring more than 22 million vehicles (auto & cycle).

Using GEICO’s online service center, policyholders can purchase policies, make policy changes, report claims and print insurance ID cards. Policyholders can also connect to GEICO through the GEICO App, reach a representative over the phone or visit aGEICO local agent.

GEICO also provides insurance quotes on motorcycles, all-terrain vehicles (ATVs), travel trailers and motorhomes (RVs). Coverage for boats, life, homes and apartments is written by non-affiliated insurance companies and is secured through the GEICO Insurance Agency, Inc. Commercial auto insurance and personal umbrella protection are also available.

For more information, go to www.geico.com.

Contacts

GEICO Communications
301-986-3271
gcorpcomm@geico.com
To view GEICO’s Blog: http://blog.geico.com/

British motorists: Over 4,000 fraudulent insurance applications made every week

By CRAIG THOMAS

The figures from 2014 show that there were more than 212,000 dishonest insurance applications for car insurance, an increase of 18% on the previous year.

Fraudulent applicants frequently ‘forget’ to disclose previous claims or unspent convictions, or provide a false address or postcode in order to claim to live in a lower-risk neighbourhood.

Another reason is a practice called fronting – where parents insure a vehicle in their name when it is mainly driven by a son or daughter.

The ABI also uncovered a number of scams known as ‘ghost broking’, which involve illegal insurance advisors selling fake car insurance policies.

These result in motorists driving around thinking that they’re insured, but in reality they face prosecution for driving without valid insurance, which can also mean having their vehicle seized and crushed.

Ghost brokers often operate using websites, and in pubs, clubs, car parks and university campuses.

Recent examples include a fake insurance adviser who was jailed for two years after making £65,000 selling fake car insurance; a con man who sold worthless car insurance to Manchester students and was jailed for three years; and an ‘adviser’ who sold over 100 fake policies to drivers in west Yorkshire and was jailed for a year.

In addition, one fake broker already serving a jail sentence was recently ordered to repay over £600,000 to 600 drivers he sold fake cover to, or face further time in jail.

The Insurance Fraud Bureau (IFB), which manages large-scale cases, is currently dealing with 26 cases of ghost broking fraud.

Mark Allen, the ABI’s fraud and financial crime manager, said: “Insurers recognise that innocent mistakes and oversights happen. But anyone lying to get cheaper motor insurance, or tempted by cheap insurance offers without first checking that they are genuine, risks driving illegally.

“The consequences include getting a criminal record and a massive financial headache if found to be at fault for a crash.

“The risks are just not worth it – especially when you can shop around for the right policy at the lowest price.

”Industry initiatives, such as the Insurance Fraud Register, MyLicence that allows insurers to check for any motoring offences, and the work of the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department in tackling ghost brokers are helping to reduce the scope for insurance application fraud.”

Shannen Doherty Reveals Breast Cancer Diagnosis in Insurance Lawsuit Against Ex-Manager

LOS ANGELES _ Shannen Doherty is battling breast cancer that worsened during a lapse in her health insurance caused by her former business managers, the actress claimed in a lawsuit filed Wednesday.

The former “Beverly Hills, 90210” star claims that her former business managers and accountants mismanaged her money and allowed her health insurance to lapse last year.

Because of that, she said she didn’t go to the doctor until she had insurance and there was a delay in diagnosing her cancer, which will likely require more drastic treatments, including a possible mastectomy and chemotherapy.

Doherty, 44, received the diagnosis in March and her doctors have said earlier treatment might have stopped its spread, the lawsuit states.

An attorney for the accounting firm Tanner Mainstain Glynn & Johnson denied the company caused Doherty’s health insurance to lapse.

“Tanner Mainstain is saddened to learn that Ms. Doherty is suffering from cancer and wishes her a full recovery,” the company’s attorney, Randall J. Dean, wrote in a statement. “However, the claim that Tanner Mainstain caused her to be uninsured, prevented her from seeking medical care, or somehow contributed to her cancer is patently false. Tanner Mainstain will aggressively defend all of Ms. Doherty’s claims in court.”

Doherty’s husband, photographer Kurt Iswarienko, also is suing the firm and its former partner, Steven D. Blatt, accusing them of mismanaging the couple’s money and leading to other financial troubles, including tax audits and liens.

A phone message for Blatt was not immediately returned.

The lawsuits do not specify how much damages Doherty and Iswarienko are seeking. Doherty has been unable to work since the diagnosis.

“The spread of the cancer has caused (Doherty) severe emotional distress,” the lawsuit states.

“The relationship between a business manager and its client is based on trust, in honesty and competence,” Doherty’s attorney, Devin McRae, wrote in a statement. “That trust was violated here, and we hope that the defendants will correct it in a responsible manner.”

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Now that sink hole is fixed, wrecked cars are revving up visits to National Corvette Museum

Now that sink hole is fixed, wrecked cars are revving up visits to National Corvette Museum

By Bruce Schreiner

THE ASSOCIATED PRESS

BOWLING GREEN, Ky.  – The car-swallowing hole has been fixed but not forgotten at the National Corvette Museum in Kentucky. Yellow tape now marks the boundaries of the cavity that became a sensation and put the museum on the map. And instead of a gaping sinkhole driving tourism, now it’s the vintage sports cars crunched by rocks and dirt.

Work ended recently to fill in the pit that consumed eight prized sports cars in early 2014. The repaired exhibit area has become a magnet for visitors, and the dirt-caked remains of the mangled cars are the stars.

Where the 60-foot-long, 45-foot-wide, 30-foot-deep sinkhole once drew gasps from visitors, now it’s the remains of the worst-damaged cars that get astonished looks.

“It’s just horrifying,” said Corvette owner Doug Kidd, of Canton, Ohio. “Nature’s a pretty big thing to deal with. They look like they went through a tornado.”

Seven of the eight cars are back on display in about the same spot where they plunged to fame. Five were too beaten up for repairs. One is fixed, another will return Sept. 3 after being repaired in Michigan and another will be restored by the museum. The eight cars carried a total value believed to exceed $1 million.

The museum’s Facebook followers now exceed 200,000, compared to about 50,000 before the sinkhole opened. On social media, photos showcasing the damaged cars outpace those of the shiny, sleek models on display, said museum spokeswoman Katie Frassinelli.

“People just really enjoy hearing the story and like seeing the damage,” she said. “I guess it’s the rubberneck effect. These cars definitely appeal to a wider audience.”

In the gift shop, jars of sinkhole dirt and rocks fetch $10 apiece. Nearly 2,400 jars had sold through July.

Wanda Cohen of Roswell, Georgia, had just posted a photo of a wrecked car on her Facebook page.

“It’s like looking at the worst wrecks you’ve ever seen,” she said.

For museum officials, the trick is to keep the site’s popularity from going in reverse now that visitors can’t gawk at the sinkhole. The museum cashed in on the giant chasm with record attendance and revenue in 2014.

Last year, the museum just off the interstate drew 251,258 visitors, easily topping the 150, 462 visitors in 2013. The museum’s prior record attendance was 200,900 in 1999. Through last month, attendance for 2015 was off just 2.5 per cent compared to the first seven months of 2014, the museum said.

“We just want to try to do our best to make sure the decrease is as little as possible,” museum Executive Director Wendell Strode said.

Maintaining that momentum will be challenging, said Jason Swanson, a University of Kentucky assistant professor in hospitality management and tourism. Even if the sinkhole had been left open, the publicity that helped spark the attendance bump would have eventually waned, he said.

“The museum is better off since more people now know of the museum because of the sinkhole’s publicity,” Swanson said. “However, 10 years down the road, 2014 and 2015 will likely be seen as an anomaly.”

The museum is doing its part to keep the sinkhole etched as a curiosity.

A temporary exhibit shows the now-famous security camera footage of the floor’s collapse and cars toppling like toys into the pit. That footage has been viewed about 8.5 million times on YouTube, the museum said. The hole opened up when the museum was closed, and no one was injured.

There’s also video of the damaged Corvettes being pulled from the hole. Also featured are condolence cards to the museum. One card-sender wrote of being “devastated to hear of your loss.”

A new sinkhole-themed exhibit is scheduled to open this fall.

Kidd said he wished at least part of the sinkhole had gone unplugged. It was an option discussed by museum leaders before they opted to fill it in.

“It’s human nature to come and see,” Kidd said.

Terry Jorgensen of Deland, Florida, said it would have been impractical to keep the hole open. Getting to see the crunched cars was more than enough, he said.

“I’m in awe of finally being here and seeing it,” he said.

The repairs began last fall and cost about $5 million, Frassinelli said. Insurance covered everything but the museum’s deductible. Donations picked up the deductible, she said.

Museum officials at first devastated by the chasm now have a much different attitude.

“We decided to embrace it,” Frassinelli said. “And what could have been a really big negative for the museum turned out to be a positive.”

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