Although Unmanned Aerial Vehicles (UAVs) or Remotely Piloted Aircraft Systems (RPAS), commonly known as drones, have been around for the better part of the last century, they have recently caught the imagination of the general public due to their many business and recreational uses.
Like any new technology, drones carry considerable risks for the operators and the general public. Insurance companies are developing new solutions to cover the basic risks while grappling with the rapid expansion of this new aviation sector, both in terms of technology and its applications.
Drone insurance risks can be simply categorised into:
third-party property and personal injury risks and
the loss or damage to the drone equipment, including base stations
The value of additional payload equipment such as cameras and sensors can significantly increase the financial value of a drone and should be considered when arranging insurance.
Around the world, aviation authorities and insurance companies are slowly establishing common rules and regulations for drone services, which means that the insurance needs for this sector are still developing.
Regardless of the rules and regulations regarding the safety and legal operation of drones, we recommend that commercial drone operators should consider third-party liability cover to protect their businesses, in the event of a serious loss.
Insurances to Consider
Liability insurance limits are presently defined by existing civil aviation regulations, which are often based on the weight of the aircraft involved. Such rules and regulations do not fairly reflect the potential liability in the event of a serious drone insurance flying loss. We therefore recommend that commercial operators should consider the bigger 'enterprise risk' arising from a drone accident and purchase a higher general third-party liability insurance cover.
Hull insurance will provide indemnity if you lose or damage your drone aircraft. However, the rapidly evolving technology behind drones can mean that the value of the drone, purely as an aviation platform, can be relatively small compared to the value of the on-board 'payload' – cameras, sensors, etc. You should therefore carefully consider a suitable sum insured that is not purely based on the drone aircraft itself.