Today we present an update to our story from last month involving an insurance coverage dispute between a wedding photographer and his insurer. Unfortunately for the photographer, our predication on how this case would come out was correct.
As you will recall, the photographer in question was sued in state court by a wedding guest who claimed that she lost the sight in one eye after the drone hit her. The photographer had a general liability policy with one million dollars of coverage. Unfortunately for the photographer, his policy, like most general liability policies, contained an exclusion for accidents arising out of the use of an aircraft, and the insurer denied coverage. The photographer disagreed with the insurer, arguing that there was coverage because “a drone equipped with a camera is not capable of transporting persons or cargo,” and should be considered “a piece of equipment,” not “an aircraft or vehicle.”
The insurer subsequently agreed to defend the photographer under a “reservation of rights,” and brought a declaratory judgment action in federal court in California seeking a ruling that there was no coverage. In deciding the issue, the court noted that an insurer seeking to disclaim coverage has to meet a high burden. Coverage clauses are interpreted broadly, and exclusions are interpreted narrowly. Ambiguities and uncertainties are resolved against the insurer, and policies are interpreted to protect the justified expectations of the insured. The court found, however, that the insurer had met its burden.
The court began its analysis with the dictionary definition of an aircraft, which is a “vehicle for travelling through the air.” The court supplemented this with the statutory and regulatory definitions of an aircraft, which define it as a “device that is used or intended to be used for flight in the air.” The court noted that none of the definitions make reference either to the carriage of passengers or to the carriage of cargo. Thus, the court concluded that the drone qualified as an aircraft. Because it was undisputed that the injury was the result of the drone striking a guest, summary judgment was appropriate.
We can now add this decision to the growing list of court rulings making it absolutely clear that all unmanned aircraft are “aircraft.” As a result, every operator who is relying on a general commercial liability policy, and does not have a specific aviation policy needs to check the exclusions to see if they actually have coverage. Failure to do so may be a very costly mistake, as illustrated by this case. Not only is the photographer completely exposed for the loss of the wedding guest’s eye, he also must repay the insurer the cost of defending the underlying suit under the reservation of rights, as well as pay the attorney’s fees he ran up in defending against the declaratory judgment action.