Drone insurance coverage is important for either recreational or commercial owner/operators of drones, but is especially important for commercial drone operations.
If you operate a drone for business purposes, you probably know that insurance coverage is a must. Even though it is not yet required in the United States, many of your clients and contracting partners require it as a condition of doing business with you. Drone insurance coverage may also be a condition for getting a permit to conduct the planned drone operation. Whether you own or lease the drone you operate for commercial purposes, you need insurance coverage for it.
Consider the range of businesses that are depending on drones more and more. You find them in agriculture, sports and news broadcasting, real estate, mapping, science, law enforcement, entertainment, and many more.
The type and extent of drone insurance coverage you need depends, obviously, on the nature of your drone operation and where you operate drones. Certain types of insurance are prudent no matter what kind of operation you have. At a minimum, you will need hull coverage, which insures the drone against damage to the drone itself, and its machinery and equipment. Hull insurance will cover most of the cost to repair or replace your drone. Deductibles for hull insurance typically range from 5 to 10% of the insured value of the drone. Without it, you will be fully liable for the cost of repair and replacement of your drone.
Also depending on your drone operation, you may need to consider is payload insurance. It covers anything that is carried on the drone, such as cameras and sensors. This insurance protects against physical damage to a scheduled payload. A deductible ranging between 5% and 10% of the insured value of the payload usually will be applied to payload items. Another insurance add-on is coverage for ground equipment, such as computers, remote controls, and stations. It usually is priced at similar rates and deductibles to hull and payload insurance.
Hull, payload, and ground equipment coverage is available to drone owner/operators and those who operate leased drones or drones owned by someone else.
Liability Insurance: The Most Important Drone Insurance Coverage You Can Have
Drone wrecks are not unusual, and they are becoming more common every day. If your drone operation injures any person or property owned by someone else, drone liability insurance is designed to cover it. Drone liability insurance protects drone operators against bodily injuries and property damage in an accident involving a drone. If you have no other drone insurance for your drone operation, you must have liability coverage.
If you are operating your drone for commercial purposes, make sure the policy covers commercial use. Liability coverage will protect your business from damage claims for property damage and bodily injury resulting from the commercial operation of a drone. The limits for coverage for liability start at $500,000, though some brokers will negotiate it up to $10,000,000 per occurrence, though it depends on the business and the clients’ needs. The coverage limits also depend on the broker’s underwriting criteria.
What Circumstances Does Drone Liability Insurance Cover?
Liability insurance protects the drone operator against damage to other people and their property. For a real life example, imagine a drone owner/operator is piloting a drone above a football stadium filled with spectators during a rock concert. The drone operator is videotaping the concert for promotional purposes. The drone has a power failure and falls into the crowd, injuring several people, destroying expensive sound equipment, injuring the drone owner/operator, and destroying the drone.
This is exactly the kind of situation where drone liability insurance is necessary. It should cover bodily injuries to the spectators and the sound equipment. However, liability insurance will not cover the drone owner/operator, the drone itself, or its payload. Other types of insurance are necessary to protect against damage to the owner/operator and the drone and its payload.
Drone accidents happen all the time. They hit power lines, trees, homes, and buildings. Make sure you have drone liability insurance to protect you and your business against injury and damage to others.
Other Coverage for Personal Injury
A new insurance product now on the market for drone owners and operators is personal injury insurance. It protects against intangible claims such as those based on invasion of privacy (arising when drone cameras fly over private property and photograph activities occurring there), copyright infringement, and similar intangible claims for damage.
This coverage is fairly new for drone owners and operators. Depending on where you are operating your drone and what is may be doing, this insurance may be appropriate for you to consider.
Drone insurance is not terribly expensive considering the risks it covers. Many drone insurance brokers offer policies payable annually or more frequently. For drone operators that use drones for short periods of time, you may be able to pay to insure the drone on a per hour basis.
Information You Need to Support a Drone Liability Insurance Application
You should be prepared to provide your drone insurance broker with certain information to support your application for drone liability insurance and get the lowest possible rates. That information can include:
- Log showing at least 50 hours of time flying the drone.
- Drone pilot license, or completion of formal training.
- Proof that you are able to automatically log the amount of time your drone is in the air.
- The cost of your drone and equipment.
- Where you plan to operate.
- History of accidents or loss.
Contact a Drone Insurance Broker for more information
Don’t take unnecessary risks with your drone business. For more information about getting drone insurance and the type of insurance policy you need, speak with a drone insurance broker. An experienced drone insurance broker can help make sure you get the right coverage for maximum protection.