Canadian Underwriter

Insuring unmanned aerial vehicles calls for ‘special cyber consideration,’ Swiss Re lawyer says

October 28, 2015   by Greg Meckbach, Associate Editor

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Unmanned aerial vehicles, commonly known as drones, can help reduce risk in pipelines and construction, but they also create special cyber risks, a lawyer for Swiss Reinsurance Company Ltd. told insurance professionals Wednesday in Toronto.

At the Lowes Fund Breakfast, recipients of scholarships were announced by the Insurance Institute of Ontario

Photo: Left to right: Brittany Beatty, Tanja Maksimovic and Neelam Vyas, recipients of scholarships from the John E. Lowes Education Fund; and David Shibatani, chair, John E. Lowes Trustees. Photo courtesy of Insurance Institute of Ontario.

Kate Brown, senior vice president and claims counsel for Swiss Re Corporate Solutions, noted that UAVs can carry sensors and cameras.

“Any time we collect data, that creates a special risk,” said Brown, the guest speaker at the annual Lowes Fund Breakfast, where scholarship recipients are presented with cheques.

Brown suggested that first-party property and third-party commercial general liability insurance policies typically do not cover a compromise of electronic data.

“You are likely going to need special cyber consideration, in which case underwriters need to pay special attention to what kind of privacy protections are in place. What are you doing to make sure people’s postal codes and ID numbers are not being released and are not available to a potential hacker?”

During her presentation, Brown said drones can be used in a variety of industries, including insurance claims adjusting, construction and oil and gas.

“Where we have seen the biggest impact is on the oil and gas safety operations,” Brown said, adding there are more than 800,000 kilometres of pipelines crossing Canada.

“UAVs provide the solution to monitoring those pipelines for safety,” she said. “You can put sensors on your drone and it can detect gas leaks. You can put a camera on your drone and it can help monitor the pace of an oil spill.”

Construction firms, she suggested, are interested in using UAVs for work that is dirty, dangerous, dull or difficult.

“They can inspect roofs,” Brown said. “They can check concrete pours, they can check cables, rebar. All of this doesn’t have to be done by people anymore. It can be done by a drone.”

But drones also carry the risk of property damage, she suggested.

“What’s going to happen if it’s going to run into a telephone or electrical wire?” Brown said. “We have very specific questions that we have our underwriters focus on. How was it designed? How much does it weigh? Where is it going? What is it carrying? What kind of maintenance schedule is it on?”

At the Lowes Fund Breakfast, recipients of the John E. Lowes Insurance Education Fund Scholarships are announced.

Wednesday’s breakfast was held at the National Club on Bay Street in Toronto.

The John E. Lowes Insurance Education Fund was established 22 years ago. The Insurance Institute of Ontario announced Wednesday four recipients of scholarships in 2015.

Two – Brittany Beatty and Tanja Maksimovic – are in their second year of the property & casualty co-op program at Conestoga College.

The other two recipients announced by the Insurance Institute of Ontario were Neelam Vyas – a fourth-year business administration student at Wilfrid Laurier University – and Zanoishta Vania, a second-year business insurance student at Fanshawe College.

Those scholarship cheques were presented Wednesday by David Shibatani, chair of the John E. Lowes Trustees.

The Insurance Institute of Ontario provides administrative support for the fund, as well as for the Toronto Insurance Conference scholarship program.

TIC, a commercial brokers’ association, is providing scholarships for the third year. Administrative support for TIC’s program is provided by the Insurance Institute of Ontario. 

Recipients of the 2015 TIC scholarships were announced Wednesday at the Lowes Breakfast. They were Jasmine Wright ( a second-year arts and science student at McMaster University), Jennifer Butler (who is entering her third year of biochemistry at the University of Guelph) and Daniella Laferriere, a third-year commerce student at Queen’s University. The scholarships for Butler, Laferriere and Wright were sponsored by Aon Reed Stenhouse, Purves Redmond Ltd. and BFL Canada Risk and Insurance Services Inc. respectively.

The TIC program is for university scholarships for relatives of TIC brokers, partners and staff. 

The John E. Lowes Fund was created in memory of John E. Lowes, past chairman of the Insurance Institute of Canada and past chairman of the Insurance Institute of Ontario. Lowes was a founding partner of Irwin, Sargent & Lowes Insurance Brokers, of Peterborough, Ont. The fund provides money to students completing a post-secondary education, which includes property and casualty insurance studies.

College level scholarships are $1,500 each and university level scholarships are $2,500 each.