The current revolution in unmanned aerial systems (UAS) technology, or drones, has led to an explosion in the numbers utilised worldwide including the power sector.
As a result of using drones many companies could find themselves with an unplanned liability exposure without understanding the potential downside. The insurance market views the use of drones actively in the aviation sector and will generally not offer cover for their operation under a standard general liability policy.
The flying robots appear to be the answer to many health and safety challenges the power sector faces. Due to their relative low cost and their wide reaching applications, drones are replacing expensive manned aircraft. Drones have helped power companies reduce their risk by making the work of linemen safer and it is a cheaper alternative than flying workmen out to sea for an offshore wind turbine inspection. Rather than a few workmen hanging off a wind turbine blade by a rope high in the air at about USD 10,000 per inspection, drones allow power companies to get a safe level of inspection results for about USD 300 without putting workers at risk.
Accordingly, the majority of policies offered by insurers are no longer fit for purpose, as drones are no longer merely used by small companies and individuals with small sub 20kg crafts. Many insurers are also excluding the use of drones from their standard general liability policies.
Companies using drones in the power sector are therefore urged to check, if their drones are excluded from their current liability policies and if not to make sure the cover is fit purpose in terms of size and usage. We also recommend speaking to your broker about covering this type of risk through a specific aviation policy. Your broker can also help push for innovative cover, such as including a no claims bonus and a profit share to reflect safe operation of the drones.
For further information, please contact Gemma Claase, Partner on +44 (0)20 7528 4129 or email firstname.lastname@example.org