Drone registration? We’ve been doing it for years…because we had to

Without a serial number and without a registration number, how on earth were we supposed to insure these things? How could we know that the aircraft we were insuring even existed? Or ever existed for that matter?

That’s a big problem when it comes to insuring something.

When Transport Risk Management began insuring drones five years ago, we immediately discovered a problem that had to be resolved before we could even attempt submitting a drone risk to underwriters for insurance consideration.  These drones had no serial numbers and they were not registered. Not only did they not have serial numbers, but their builders, owners and operators were doing it purposely in order to maintain anonymity.

In 2010, we were approached by a professional unmanned aerial photography group seeking an insurance program for their members. Being one of the largest providers of aerial film production (owned, and non-owned) insurance in the United States, Transport Risk Management clearly had a great deal of interest in finding an insurance solution for the unmanned aerial film industry therefore we decided take on the challenge of building an insurance program for unmanned aerial filming.

Our first major challenge arose when we were advised that the types of aircraft that this group primarily used, Freefly CineStars, were home-built and did not have serial numbers.  The lack of serial numbers presented a serious issue for us and our insurers.

If we cannot identify the aircraft, then we cannot determine ownership, we cannot determine insurable interest and most importantly, cannot determine if the aircraft involved in a loss was even the aircraft insured under the policy.

Without that, how could we pay a claim?

Then there was the problem of hull physical damage coverage. Without any way to identify the aircraft or ownership, how could we verify that there was no lien and that the Insured maintained clear title and ownership?

As a group, we discussed designing a numbering system and how to physically apply the number to the aircraft. No one could agree. We discussed verification of ownership and insurable interest. We discussed how to identify build components, how to maintain the database and who would do it. Then we were presented with another stark reality. Even if someone chose to take the project on, most of the aircraft owners wanted nothing to do with numbering their aircraft or participating in a system that would identify them as the owners.  It turned out they were purposely maintaining anonymity.

In the end, nobody associated with the group was willing to design a solution or build a system and very few of the aircraft owners wanted to number their aircraft. It was then that we realized if we wanted to insure unmanned aerial systems or UAS, we were going to have to design a numbering system ourselves, from scratch, and find a different group of owners willing to participate.

Transport Risk Management then went to work designing a data plate and numbering system that would correlate with documentation provided by the Insured and would be maintained in the Insured’s policy files.  The documentation must verify existence of the aircraft, ownership and insurable interest in the aircraft and prove that the aircraft involved in a loss was actually the aircraft insured under the policy. The documentation also had to confirm clear title and ownership. The data plate had to fit on the aircraft and it had to provide for other major components such as gimbals, ground stations and transmitters.  After all, we were insuring an unmanned aerial SYSTEM, not just an unmanned aerial VEHICLE. Oh, and it could not interfere with the sensitive electronic systems of the aircraft and it could not be transferable.

Next, Transport Risk Management had to present the data plate design and documentation to all of our insurers in order to obtain approval along with their agreement to recognize the TRM XXX data plate number as an approved identification number for the purpose of identifying and insuring the aircraft.

Then the big question, would our Insured’s agree to provide the documentation and to put the data plate on their aircraft?  Without that, it was useless.  In the end, we decided that if we agreed to provide insurance coverage to them and their operations, our Insured’s would have to agree to provide the required documentation and place the data plate on their aircraft and components.

Today, we have more than 4,000 TRM XXX data plates issued and in use worldwide with complete documentation on file along with agreement from all of those owners, builders and operators.

When a Transport Risk Management aircraft is involved in a loss or needs to be identified, a single call to the phone number on the data plate along with the data plate number will tell us who owns it, who operates it, who the pilot is, what type it is, what it’s used for, the owners contact information and if it’s insured. That’s a lot more than any FAA registration or manufacturer serial number will ever provide.

The TRM XXX data plate is on the SwissPost Matternet One Aircraft which can be seen on the inside upper right of the frame in this picture:  Swiss Post Matternet One

The TRM XXX data plate has flown in some of the most remote regions of the world for humanitarian purposes. And continues to fly on a multitude of new aircraft being tested globally for industrial and humanitarian purposes.

The TRM XXX data plates are being used as Serial Numbers for FAA “N” number registrations as can be seen here for N147BW.

And we have developed custom numbering systems and innovative policy structures for large fleets and manufacturers such as Kespry. The Transport Risk Management “KSY” data plate can be seen on the Kespry drone in the home page picture.

We can assure the FAA and the industry as whole that most aircraft in testing and R&D do not have a serial number or any way to verify ownership.

Without a number, new aircraft cannot be insured and all test sites require insurance.

Without a number, new aircraft cannot even be registered with the FAA. That’s why we see so many DJI Inspires and Phantoms on 333 Petitions.

Transport Risk Management, Inc. foresaw this registration problem years ago and was forced to solve the problem then. We took it on and we solved it. Innovated you might say.

Innovation from a crusty and dusty old industry like insurance lead the way and solved a problem before most even knew the problem existed. Not just the numbering issue but more problems unforeseen by the industry that will soon emerge as well.