Christine Davis Named to General Council of Tort Trial and Insurance PracticeWe are pleased to announce that Christine Davis, an attorney on our Policyholder Insurance Coverage team in Washington, D.C., was recently selected to serve a three-year term as a member of the General Council of the Tort Trial and Insurance Practice Section (TIPS) of the American Bar Association, beginning in August 2019.  The General Council is the section’s governing body, which oversees the work of the section to maintain its prominence in relevant fields and provide invaluable benefits to its members.

Election to the General Council is a competitive process that can only be attained after years of hard work and proven commitment to the section. Christine’s election to the council is recognition by her peers of her contributions to the section and the legal profession to date.

Christine has been an active member of TIPS since she was selected as a TIPS Fellow over a decade ago. During that time, she served in various leadership roles, including as chair of the Business Litigation Committee. In her tenure as chair, the Business Litigation Committee was selected for the Award of Excellence, which is given to the top-performing committee of roughly 35 working committees.  Christine is also vice chair of various other committees, including the Insurance Coverage Litigation Committee and the Women Trial Lawyers Committee.

Christine is currently editor-in-chief of the Tort Trial and Insurance Practice Law Journal, the section’s premier law journal, which presents scholarly articles on timely and pertinent tort and insurance issues. She is also the current executive editor of TortSource, another of the section’s publications that presents readers with timely information on legal developments in the tort and insurance fields. Christine is herself a frequent contributor of articles on insurance coverage issues.

With nearly 20 years of experience in the insurance coverage field, Christine has advised corporate policyholders in all stages of coverage disputes, ranging from informal negotiation, formal mediation and arbitration, to litigation and appeal. She also has considerable experience in claims handling issues and insurance placement.  Christine can be reached at cdavis@bradley.com.

It’s a Bird! It’s a Plane! But Is It Insured? California Case Reinforces Importance of Liability Coverage for Drone OperationsAs the popularity and diverse nature of drones increase, the liability risks associated with drone operations increase as well. A California federal judge recently held that a standard CGL aircraft exclusion barred liability coverage for injuries related to drone operations. The case arose out of a wedding reception gone wrong when a wedding photography company operated a drone to capture the big day. While the drone was hovering at eye level, a guest collided with the drone and sustained serious injuries, including loss of sight in one eye. The court found that the drone fell under the ordinary meaning of the word “aircraft” as defined in the Merriam-Webster’s Collegiate Dictionary, even though the policy did not define the term “aircraft.” The court ruled that the insurance company could recover the costs it spent defending the wedding photographer because the exclusion meant that the insurer did not have an obligation to defend the photographer against the suit filed by the injured wedding guest.

In a previous post, we advised against relying on the ambiguity of the term “aircraft” to avoid application of the aircraft exclusion in the standard CGL policy. The ambiguity argument has become all the more dangerous as courts like this one decide that a drone is an “aircraft.”

Reliance on a CGL policy becomes more problematic because many CGL policies explicitly exclude coverage for drones. For example, Commercial General Liability Form CG 21 09 06 15 excludes coverage for an “unmanned aircraft,” which is defined as an aircraft that is not designed, built, or modified to be directly controlled by person on or in the aircraft.

CGL policies can provide liability coverage for drone operations by endorsement. Commercial General Liability Form 24 50 06 15 provides coverage for an unmanned aircraft. Coverage A provides coverage for bodily injury and property damage, while Coverage B provides coverage for personal and advertising injury. You may purchase either coverage or both.

A CGL policy does not provide property coverage for the drone or its cargo; it provides liability coverage only. Commercial Property Form 04 14 12 16 protects drones that you own, rent or lease if you have a contractual obligation to provide insurance. This endorsement is appropriate for a drone if you are not transporting cargo. If you choose to endorse your standard policy with this form, carefully describe your operation in its entirety in the schedule to procure complete coverage. Commercial Inland Marine Form IH 00 61 01 16 is a separate form that covers cargo, but its coverage is limited because it lacks business interruption coverage.

A specialty drone policy generally provides liability coverage for drone operations, as well as property coverage for the drone itself. Because specialty policies are customizable, you can select what coverage you want. Both annual policies and on-demand policies are available. On-demand policies provide time-limited coverage for specific operations, while annual policies provide coverage throughout the policy period. Insurance companies offering specialized drone policies tout their comprehensive coverage for those companies that regularly utilize drones. Both new entrants into the insurance market as well as traditional aviation insurance companies are rushing to provide this coverage, thus expanding coverage options for drone operators.

For more information on drone coverage, please view our webinar.

FEMA Reverses Halt to New Flood Policies during Shutdown; New Six-Month NFIP Extension Leaves Debate over Reforms to 116th CongressFollowing criticism from industry groups and members of Congress, FEMA has retreated from a December 27 announcement that it would stop issuing new flood policies and renewals during the ongoing partial shutdown of the federal government. Meanwhile, a six-month extension passed by Congress and signed by President Trump on December 22 gives lawmakers through May 31, 2019, to reach consensus on possible reforms for the National Flood Insurance Program (NFIP).

Costly natural disasters in recent decades have tested the sustainability of the program, and in 2017, Congress forgave $16 billion of NFIP’s debt to keep the program solvent. These challenges have led some in Congress and the insurance industry to call for reforms to the program, including changes to align rates more closely with risk.

Changes in the makeup of the 116th Congress may reshape the debate, including the passing of the chairmanship of the House Financial Services Committee from Jeb Hensarling, an advocate for substantial changes to NFIP, to Maxine Waters. Waters previously sponsored legislation that would have brought significant reforms to NFIP, but in recent years has emphasized the need to ensure that rates remain affordable.

The reauthorization of NFIP, even as leaders failed to agree on funding for the government, again demonstrates the bipartisan popularity of the program and commitment to its continuity, notwithstanding disagreement over long-term changes.