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The Soaring Need for Commercial Drone Insurance

By 2030 there will be an estimated[1] 76,000 drones operating in UK skies and 628,000 jobs in the drones industry, writes Jacqueline McGivern, Key Account Manager, Autoline Insurance.

Amazon may be the most high profile for its public testing of drones for Amazon Air, but increasing numbers of businesses throughout the UK, across the private, public and third sectors, are recognising the benefits of drones in supporting and aiding their daily work.

Whether it’s to help keep people safe, drive more efficient ways of working, monitor environmental change, deliver medicines, or assist infrastructure inspections and construction, one thing however is clear – as the usage and complexity of operations around drones grows, so does the associated risk.

Drone Insurance

You only have to consider the drones that crashed into the Saudi Arabian oil processing plants in September, knocking out 5% of the world’s oil supply; or the upheaval caused by two drones to operations at Gatwick Airport last December, which saw the UK’s second busiest airport close for 33 hours, to appreciate the potentially devastating impact this technology can have on the environment, economy and people’s livelihoods.

More commonly, incidents around drone usage involve accidental injury to a person or damage to property and tend to be attributable to pilot error, adverse weather conditions, loss of signal or poor battery maintenance.

In a welcome move, new legislation, effective from 30th November 2019, will make it a legal requirement for all owners of drones weighing 250 grams or more to register their drone with the Civil Aviation Authority (CAA) and complete an online safety test.

Additionally, the current law states that if you are flying commercially or your drone weighs more than 20kg, insurance is required. As a minimum, you will require an adequate level of public liability insurance to protect against legal liability for third party property damage or injury whilst using a drone.

Aside from any safety considerations, given that many high-end drones are expensive investments it is also sensible to consider drone insurance to cover the device in case of damage or loss. There is always the risk of cyber attacks, the theft of the drone and ancillary equipment such as cameras, batteries and iPads, and damage to the drone from poor weather.

When considering what level of insurance you require, look at the worst-case scenario and ask yourself what damage could potentially be caused and how much would it cost and whether you are flying your drone in a ‘hazardous’ location, such as a city where you may be prone to causing more damage to others if something goes wrong

As the drone industry grows at an astonishing pace, it’s clear that those piloting them, whether for commercial or recreational use, will have to keep up with a rapidly evolving regulatory, legal and insurance landscape. In such a fast-changing industry, it is always important to frequently review any insurance policy relating to drones, ensuring it remains fit for purpose at any given time. The high costs of paying legal fees or replacing your drone means insurance can save you money in the long run.

[1] PwC’s ‘Skies without limits’ report