Drone Insurance Providers
To Get Your Drone Business Up and Running, You Really Should Be Insured
Drones are small crafts that enjoy two distinct features not shared with the aviation marketplace:
1. they are unmanned, having no human pilot/operator onboard, and
2. they are remotely operated by a pilot using data link transmissions. In addition, these UAS have the ability to house high-powered cameras, infrared sensors, facial recognition technology, and license plate readers.
Drones are currently legal if they are for personal use. Anyone can fly a drone within his or her field of vision and at a height of no more than 400 feet above ground, provided they are not in restricted areas like airports or government installations, such as the White House.
In June 2016, The FAA approved the rules for the routine commercial use of drones known as Part 107.The rules just took effect on September 1, 2016.
The integration of Unmanned Aircraft Systems (UAS) into the National Aerospace System is expected to contribute $82.1 billion to the nation’s economy by agriculture, public safety, and other activities. Already, unmanned aircraft are enabling jobs ranging from agricultural monitoring to wild re surveillance to be done more safely, cost efficiently and effectively than ever before.
By 2020, FAA estimates that about 30,000 small-unmanned aircraft will be used for all types of business purposes. Unmanned aircraft hold tremendous promise across multiple sectors. They are already in use in a variety of applications and anticipated to benefit much more, including:
- Agricultural monitoring
- Disaster response/relief and management
- Real Estate and Flood mapping
- Damage assessment
- Law enforcement /border surveillance
- Weather monitoring
- Aerial imaging/mapping
- Television news coverage, traffic monitoring, sporting events, moviemaking
- Environmental monitoring
- Oil and gas exploration/mining
- Mail/Freight transport
- Pipeline/ power line surveillance and surveys
- Construction and critical infrastructure monitoring
Unmanned aircraft can play a pivotal role in firefighting, search and rescue, and explosive detection. They are poised to become a critical public safety resource, with their use expected to become increasingly commonplace by municipalities of many sizes in the months and years ahead.
If you own a UAV and plan it to use it for business purposes or individually in a for-profit capacity, you really should consider having Drone Insurance.
Insuring Your Drone for Hobby Purposes
Recreational or hobby UAS use is flying for enjoyment and not for work, business purposes, or for compensation or hire. If you operate a drone for hobby or recreational purposes, it is easy to get insurance. While a Hobby or Recreational drone is capable of sustained flight in the atmosphere, it is flown within the visual line-of-sight of the person operating it and is strictly flown for hobby or recreational purposes, not for profit. Many home insurance policies general include “model or hobby aircraft not designed to fly people or cargo” as personal property.
Since liability for an accident caused by your drone is a bigger concern, it might make sense to join the Academy of Model Aeronautics. A regular membership is $58 a year and one of the benefits of membership is $2.5 million of general liability protection in case your drone crashes into a car window or hits someone. Insurance through the academy is in excess to any other coverage you have, such as homeowners insurance — meaning it will pay out only after other insurance is exhausted.
What is Commercial Drone Insurance?
Under the Small UAS Part 107 rules, a commercial drone is less that 55 lbs. and must be registered with the FAA. Drone insurance acts like any other insurance policy. If you lose your drone or get into an accident, the company will cover your damage and liability costs to a certain extent.
Some of the reasons you may want to obtain drone insurance include:
- Most company commercial general liability policies contain exclusions for aviation exposures, which likely also apply to drones.
- Your drones could cause property damage or bodily injury.
- Insurance increases the credibility of your business by showing that you are professional, thorough and reputable.
- You might need a minimum level of insurance coverage to secure a permit to fly or carry out aerial work in certain areas.
- In order to secure a contract, some larger company require insurance for each of their vendors.
What are the Requirements to obtain Commercial Drone Insurance?
Insurance Companies will want to see that you are a safe pilot and prepared for risks. Just like car insurance companies want to insure safe drivers that have had driver’s training to prevent accidents. Be prepared to provide:
- Proof of training such as a Remote Pilot Certificate from an FAA approved program.
- Proof of purchase of your drone and any additions to the drone
- FAA registration certificate
- Operating Manuals
- Maintenance logs
Drone Insurance Will Typically Cover
Aviation liability: coverage of acts of war, terrorism, hijacking, acts of sabotage, unlawful seizure of aircraft and civil commotion
Professional Indemnity: coverage for legal liability for any negligent act, error or omission arising out of the use and operation of UAV including Data Protection and Invasion of Privacy claims.
Accidental loss of or damage to the UAV equipment including disappearance
Coverage for Aircraft operators, on-ground crew, employees
Independent Contractor’s Liability
Worldwide coverage: You can operate your drone anywhere in the world. Many policies will exclude any country where the operation of the drone is in breach of Unite Nation Sanctions as well as “high political risk countries: Iran, Iraq, Libya, Syria, Yemen, Afghanistan, North Korea, Pakistan, Myanmar, Columbia, Ecuador, Peru, Algeria, Burundi, Central African Republic, Congo, Eritrea, Ethiopia, Ivory Coast, Liberia, Mauritania, Nigeria, Somalia, and the Sudan.
Cost of Commercial UAV Insurance
A commercial insurance policy for a Phantom covering liability up to $1 million and hull damage up to $1,500 can run as little as $1,350 a year (with a 10-15% deductible).
According to industry experts, rates currently range from about $900 per drone per year on the low end to $10,000 per drone per year on the high end. Your rates will depend on your situation.
An insurance company determines your rates—and the amount of coverage you can purchase—by a number of factors, including:
- What UAV you are using? Certain models are more stable and well built than others.
- The purpose of the UAV. A UAV used for agriculture is less hazardous than a UAV used for filmmaking.
- Who is operating the aircraft? An experienced and well-trained operator is less risky than a new pilot.
- Where is the UAV being operated? A farmer flying a drone over his own fields is less risky than an event operating flying a drone over a large concert.
- What processes & systems do you use to manage your drones & pilots? A company with standard operating procedures and risk management strategies in place are a safer bet than a company without such.
- Preflight & safety checklists?
- Can you provide Proof of maintenance?
Companies that can prove high standards for training, operations and management will typically qualify for more coverage at better rates.
Where to Get Drone Insurance Coverage
There are a lot of brokers out there, but only a handful of insurers that underwrite drone/UAV insurance. The brokers are kind of like car dealerships. They sell you the insurance, but they don’t make the product. The insurers are the ones who actually set the prices and pay out in case something bad happens.
Today, there are roughly a dozen companies writing commercial drone coverage. While policies vary from carrier to carrier, most offer hull and liability coverage, third-party liability exposure for business interruption and first-party property damage for the drone itself. The most well-known drone insurance providers are presented below:
At the present time, Insurance is not required to operate a drone (UAV), however, all drone operators need to protect their self and their businesses from the risks and potential liabilities that come with this new and growing industry. To address that need, individuals and businesses must evaluate and assess their existing insurance policies to determine whether drones are covered, and if not, pursue coverage solutions offered by insurance companies that are specifically designed for the exposure faced by both hobby and recreational as well as commercial drone operators.