Drone Insurance – Personal and Commercial

Drones are widely used for commercial purposes nowadays. They are used for photography, filming, surveillance, inspection, mapping, military, search and rescue operations, crop science, and a whole lot more. In some cases it is recommended to purchase drone insurance because crashing an expensive drone can be heartbreaking.

If you are using a drone for business purposes, then it is wise and important move to get a commercial drone insurance. You invest a lot of money in buying a drone to use for your business so it makes a lot of sense to have it insured in case of accidents. You wouldn’t want to lose your hard-earned money in paying for liability and also repairing or replacing your drone in case of accidents.

Reasons for Getting a Commercial Drone Insurance

• Another good reason for getting a drone insurance aside from helping you save money in case an accident occurs while using your drone is to help you close deals with prospect clients. Some clients require you to have an insurance to be able to work for them. This is to give them peace of mind in the unlikely case of an accident.
• Some countries just like the US, don’t require an insurance for personal or commercial drone use while some countries like Canada, require an insurance if you will be using your drone for commercial purposes.
• Finally, having an insurance is a strong and credible indicator for your business prospects. Getting an insurance, most especially liability insurance, shows how reputable and professional you are.

Requirements from UAV Pilots for Insurance Companies

1. Operating manuals
2. Record of parts and other accessories purchased
3. Maintenance logs
4. Proof of training or certification

Potential Drone Uses than can be Insured

• Emergency Response
• Law Enforcement
• Construction
• Real Estate
• Videography and Filming
• Gathering News
• Rescue and Operations
• Highway and Railroad Maintenance
• Geology and Archaeology Exploration
• Fire and Rescue
• Security and Surveillance
• Protection of Facilities
• Agriculture

Types of Drone Insurance Coverage

1. Liability

Liability is usually one of the biggest concerns of any business especially for the ones that operate aircraft. A drone liability insurance will protect you and your company from bodily injury and property damage claims that may occur while operating the drone. This is the basic insurance that is usually required for commercial use of drones. This coverage is required before purchasing other types of insurance coverage.

Some companies may set limits as to what and how much will be covered in the policy. Liability limits usually start at $500,000 and this amount can be negotiated to the amount that is required by your business and your clients.

2. Hull

Hull is the second most important coverage after getting a liability insurance. Hull’s coverage protects your company or business’ financial cost that may be incurred due to physical damage to your drone/s. The value of coverage for this type of insurance is usually quoted on an “Agreed Value” basis agreed upon by the business owner, the broker, and the insurance company based on the market value of the drone. The insurance company gives a check for the insured value and deducts any deductibles that are applicable. The deductibles are normally between 5-10% of the insured value of your drone which also depends on your insurance policy.

Some companies however may adjust the value of the drone to its current market price which is why it is necessary to have an agreed value based on the current market price of your drone.

3. Payload

Payload coverage is similar to hull coverage. This coverage is for companies that own a lot of sensors or cameras that are to be carried by the drone. This coverage protects the insured from any physical damage losses to a payload that is scheduled. There is also a deductible amount between 5-10% of the insured value of the whole equipment.

4. Ground Equipment

Ground equipment refers to all the other items used in controlling your drone which can be found on the ground such as remote controllers, tablets, laptops, ground stations, and UAV cases. These items can be included in your insurance policies on top of the liability and hull insurance.

5. Non-Owned Coverage

This type of coverage is for drones that are not owned by the business or the company. The coverage is similar to that of the owned coverage. There is a non-owned liability coverage to protect the company from bodily injury and damage property claims that may occur using a drone that is owned by someone else. There is also a non-owned hull coverage to cover the physical damage to the drone that is operated by the insured but owned by someone else. A non-owned payload coverage is also crucial if your company uses expensive sensors and cameras that you do not own.

Cost of Drone Insurance

There are two parts of a drone insurance which covers a full range of drones:

1. Liability (damage and claims on property damage or physical injury brought about by third parties)
2. Hull damage (damage to your drone)

The cost of a commercial drone insurance policy depends on the value of your drone and the liability amount. For example, a Yuneec Typhoon H or a DJI Phantom 4 with a liability coverage of up to $1 million can cost around $600-$800 per year which still depends on the background, the volume, and the experience.

There are also some companies that called on-demand drone insurance companies that charge you an amount by the hour. Verifly for example charges as little as $10 per hour for a liability coverage of up to $1 million.

The insurance policies for each company varies so it’s always best to get a quote from different insurance companies in order to know how much exactly it will cost and  how much the coverage will be.

Information Needed by Drone Insurance Companies

1. Personal information of the insured including address, phone number, and other contact information
2. Information about your drone
3. The cost of each part of your drone including equipment and other accessories
4. The type of coverage that you will be needing
5. Where you are planning to fly your drone
6. Total number of hours you have flown your drone
7. Training or certifications received with regards to operating drones
8. Previous history of loss or accidents

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