If you own or operate a drone, you already know that drone accidents do happen. When drone accidents happen, someone can get hurt and property can be destroyed. Make sure you are insured against injuries and property damage arising out of an accident involving your drone.
Drone activity is on the rise. If you use a drone in your business, you will need separate drone insurance to be protected against liability and damage. You may even need a professional drone pilot license before you can get drone insurance, depending on the insurance agency. Gone are the days when you can rely on your homeowner’s policy to insure you, even when you operate your drone only recreationally and you satisfy any conditions for coverage under your policy. (You need to check with your agent and your policy to understand and confirm any coverage.)
Drone insurance is similar to the insurance you have on your car, though drone insurance is not legally required in the United States (yet). Even so, many of your potential business clients will require you to be insured before they will do business with you. So, the reality is that you must have drone insurance to operate a responsible drone business.
Description of Drone Insurance Coverage
Drone insurance is available in a range of coverage types. Each type protects against different risks, as described below.
Liability coverage protects drone owners against bodily injuries and property damage in an accident involving a drone. If you own a drone and have no other drone insurance, liability coverage is a must-have. 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.
Once you have adequate liability insurance to cover damage to people and their property, you can add other types of coverage. After liability insurance, the next type of drone insurance you should consider getting is hull insurance. Hull insurance, also called hull and machinery insurance, covers damage to the drone itself, and its machinery and equipment.
With hull insurance, the most of the cost to repair or replace your drone is covered by the insurance policy. The main risks covered under hull and machinery insurance may include:
- Total loss of the drone.
- Damage to the hull, machinery, and equipment.
- Salvage and applicable charges.
- Legal costs and labor costs.
- Costs for collision defense and attacks.
- Dry docking expenses.
In short, physical damage to a drone can be covered by hull and machinery insurance. Drone owners can choose to buy hull insurance that covers all risks and total loss, or limited conditions only. Typically, deductibles for hull insurance range from 5 to 10% of the insured value of the drone.
Without hull insurance, you will be fully liable for the cost of repair and replacement of your drone.
Another type of insurance you may need to consider is payload insurance. It covers anything that is carried on the drone, such as cameras and sensors. This insurance is protects the business from any physical damage to a scheduled payload. A deductible ranging between 5% and 10% of the insured value of the payload will be applied to payload items.
Insurance coverage for ground equipment, such as computers, remote controls, and stations, is another optional add-on. It usually is priced at similar rates and deductibles to hull and payload insurance.
Non-Owned coverage protects the operator of a drone when the operator is not the owner. Non-Owned liability coverage protects an operator against damage and injuries that occur from operating a drone that is owned by someone else. If your business operates any drone that you do not own, you need to consider Non-Owned liability coverage. The limit on Non-Owned liability coverage is usually the same as the owner’s liability limit.
In a similar fashion, Non-Owned hull coverage protects the operator of a drone against damage to the drone itself when the operator does not own the drone. The amount of coverage is set by the operator. Likewise, Non-Owned payload insurance protects the non-owner operator of a drone’s scheduled payload. The availability of this insurance and the amount of coverage will be determined on a case-by-case basis.
A new insurance product now on the market for drone owners and operators is personal injury insurance. It protects against claims for invasion of privacy (arising when drone cameras fly over private property and photograph activities occurring there) and similar intangible claims for damage.
When you call an insurance broker to discuss cost, the broker will want to know specific information about your drone business. The cost of your drone insurance will depend on factors such as:
- Amount of flight time you have logged.
- Whether you are an FAA-licensed drone pilot.
- Whether you keep a maintenance log.
- Whether you own or lease the drone equipment.
- Amount of formal drone pilot training you have.
- Nature of your drone business activities and where you operate the drone, for example, over urban areas or water.
- Cost and value of your equipment.
- Number of drones you own or operate.
- Accident history.
Contact a Drone Insurance Broker for More Information
Drone insurance is crucial to operating a successful drone business. Without drone insurance, you are literally flying along the edge of disaster. Having a sound drone insurance policy will let you relax in the knowledge that your business is protected against financial loss if an accident were to happen. And a drone insurance policy is one great way to build your clients’ confidence in your drone business. So don’t delay, contact a reputable drone insurance broker to get a free quote and discuss the right kind of drone insurance for your business.