Drone insurance. It’s a term you don’t hear very often and is most likely not something most people think about when they see a UAS take off and conduct some sort of commercial operation. But it might be something we think about very often if we were to find out that our drone ran into the side of an airport control tower or got sucked into a jet engine on takeoff from one of the major airports in the world. In fact, this happened recently in Mexico City, although there were no injuries involved. The potential for these types of incidents is very real, and accidents do happen. And while drones are generally pretty tough, taking one out can cause extensive damage to property and equipment, as well as endanger life. This is where insurance comes in.
Commercial drone insurance is something that a lot of us don’t think about until we need it, but what exactly is it and how does it work? And why should you even bother getting drone insurance in the first place? Well, from personal experience I can say that finding out there isn’t any sort of cover when you really need it is an unpleasant surprise. In this article I’ll be going over some of what to look for when shopping for commercial UAS insurance, as well as some potential scenarios when having drone insurance would come in handy.
To begin with, we should get into just what exactly “insurance” actually means. According to Webster’s dictionary, Insurance is:
1) A contract whereby one party undertakes to indemnify another against loss by a specified contingency or peril.
2) A system or arrangement providing financial protection against specified contingencies, especially loss in the form of money by an institution such as an insurance company
So when we’re talking about drone insurance, it is basically just some sort of arrangement between ourselves and an outside organization wherein they will pay for losses, usually within certain limitations. This sounds pretty simple so far, but where do these losses come from? Well, if you’ve done anything with drones before then you definitely know that they can be expensive machines.
Some of the leading risks involved in drone usage involve the following:
- People contacting drones
- Loss of control causing damage to third parties or their equipment
- Damage caused by the drone itself while it is out of control or not running properly
- Drone theft or loss
Of course, there are several more possibilities of things that could happen to your UAS besides what I’ve listed here. But these are all pretty common risks involved with using a drone for commercial operations. And while most insurance companies won’t cover some of these must-have “accidents” on their policy (like stealing your own drone), others are offered as an option for additional premium payments. This might be something you want to consider if you think any of these things will be happening on a regular basis. Something else that can vary among insurance companies is the “peril” portion of the definition. What this means is that there are different types of coverages offered for drones, such as:
Liability (Damage to Property and Bodily Injury) – This type of coverage insures against damages caused by your drone or other events related to drone use or ownership. This includes loss due to theft, vandalism, and various other situations where you may be held responsible for the injury/death of another party.
Loss of Equipment – This type of policy covers damage done to your actual UAS equipment only. It usually does not cover any personal belongings or other items you might have with you during a flight. They will also generally exclude instances where the pilot error was at fault.
Medical Payments – This type of policy pays for injuries to people other than the pilot (such as passengers) who might be injured during an insured event. The medical payments usually only cover first-party injuries up to a certain amount, with any additional costs being your responsibility.
Insecure Flight Zone – This is a specific type of coverage that may or may not be offered by various insurance companies and it covers damages caused during flights where there was no preflight inspection performed on the unit before launch. These types of policies are often offered in places where there is a high risk of theft, either at the location itself or along the route between locations.
Keeping all these different facets in mind when shopping for drone insurance can definitely be a challenge. But don’t let that discourage you, insurance companies are generally open to adding additional riders or products to their existing policies for extra premium payments if needed. So shop around and talk to your insurance agent about what might be best for your specific situation.