As thousands of new drone businesses pop up all over the country, drone pilots are learning about the complexity of drone insurance and their need to get their company covered.
“Drones have the potential to cause accidents costing up to $10m, an insurance company has warned.” In a report Allianz Global Corporate & Specialty (AGCS) called for systematic registration of drones as well as robust training for operators.
“A pilot losing control of a UAS [unmanned aircraft system] during a building inspection could result in a total liability easily in excess of $5m, if the UAS crashed into a truck or shop, for example,” said the report. “Even a small UAS could cause as much as $10m in damage alone when hitting an engine of an airplane.”
Source: Supply Management
Why Businesses Need Drone Insurance
The FAA anticipates that, by 2020, approximately 30,000 small Unmanned Aerial Vehicles (sUAVs) will be flying through the U.S. skies. These sUAVs will be flown on a variety of missions, costing several thousand dollars, and flown by a diverse set of businesses including real estate brokerages, engineering firms, construction companies, home inspectors, and commercial photographers and videographers with skill levels ranging from beginner to expert. What could go wrong?
Even a well-trained and experienced operator can crash his or her drone. Unpredictable weather, interference from radio towers, and UAV malfunction are among many factors that can cause a drone to fly away or come crashing down.
How is Drone Insurance Different from a CGL?
Many businesses obtain Commercial General Liability (CGL) policies to protect their firms from claims arising from bodily injury, property damage, products, operations, and advertising. In most cases, these policies do not cover aviation-related claims. Even skilled and licensed operators face the risk of causing harm to people or damaging property.
So What Exactly Is Drone Insurance?
Currently there are two types of Drone Insurance:
- Drone Liability Insurance covers the cost of property damage or personal injury resulting from a sUAS operation. Liability insurance carries the highest premiums and provides the greatest amount of coverage.
- Drone Hull Insurance will help you protect your personal or business property.
Items often covered include:
- Gimbal Coverage
- DSLR & On-board Camera Coverage
- On-board Components Coverage
- Premises Property Coverage
Risks of Flying Without Drone Insurance
The expansive list of regulations imposed by federal and local governments upon the sUAS industry is no secret. Most drone pilots would probably agree with lawmakers that a certain degree of regulation is necessary to protect the public. sUAVs can cause serious damage to property, personal injury or even death, and the current set of regulations makes adherence a challenging, but not impossible, endeavor. If you, or your employees injure a person or damage property while violating one of these regulations, you and your company may be found negligent and subject to a large penalty. Contact your insurance provider to learn whether your coverage would still apply in the event of an infraction.
Is Drone Insurance Required by Law?
In many parts of the world, including Canada, commercial drone operators are required to obtain insurance. The FAA does not currently require U.S. operators to be insured to fly a drone for either recreational or non-recreational purposes, but businesses should diligently weigh the potential risks and associated costs when considering insurance coverage. Companies with which you contract might require insurance.
How Much Does Drone Insurance Cost?
Commercial airline and automobile insurers leverage sophisticated algorithms and a trove of data when determining the appropriate rates to charge for their policies. Commercial UAV operation has been, thus far, a niche practice employed by relatively few organizations and has not generated a substantial history upon which insurance companies can effectively price their risks.
The good news for operators is that premium prices are dropping. The price reductions can be attributed to an increase in the amount of available data and to an increase in the supply of insurance providers entering the mix. Sixteen months ago, it would have cost over $1,400 to insure a DJI Phantom 2. Today, it costs less than $900 to insure the more advanced Phantom 4.
Suggested Drone Insurance Companies
It is important to learn about the different types of drone insurance currently available.
1. Verifly: On Demand Drone Insurance
Are you worried that you will not make proper use of a full year insurance commitment? Verifly is a mobile application that allows you pay per hour for insurance coverage, whether you are flying commercially or recreationally.
How it works:
- Choose a location where you want to fly your drone, and see real time hourly prices.
- Approve your insurance plan and coverage.
- Fly with confidence.
2. Acend: Drone Insurance Simplified
Drone insurance that is instant, custom, and effortless. We combine big data, telematics, and analytics to lower cost, reduce risk, and provide real time insurance coverage based on your UAV project. Pay for how you fly, and only when you fly.
- Flexibility to change limits and lengths of coverage.
- Valuable discounts for hardware, software and training.
- Access to tools to help grow your drone business.
3. Global Aerospace: Traditional Aviation Insurance
If you are hoping to get drone insurance the more traditional route, speak with a broker for Global Aerospace. They will help you learn about your options.
Information Needed to Apply for Drone Insurance
So how should you begin applying for drone insurance. For non-pilots, here is a checklist for starting your application:
- Have you completed FAA Part 107 Certification?
- Have you successfully completed a UAS Part 107 Test Prep course?
- A flight log detailing flights and UAV model
- Do you ‘regularly’ operate drones for commercial purposes?
- Date manufacturer’s training was completed
- Model used in training
- Name of school
- Initial Manufacturer’s Training
- Recurrency Training
- Crew/Resource Management (CRM)
- Simulator Proficiency/Recurrent
For more information on flight training, visit our Phantom and Inspire Training course page. This course will teach you about the rules and regulations for safe flight, emergency procedures, and the details of the DJI Go App. Take our live FAA Part 107 Pilot Certification, visit our test prep page, before taking the test. You can also take our FAA Part 107 online course.
To Get Insured or Not Get Insured?
We hope that this post convinced you to get drone insurance for your business. Drone insurance is so important in protecting your business. Don’t get caught wishing you had it.
DARTdrones is a national flight school for drone pilots offering courses online and in-person in over 40 cities.