The advent of drone technology has helped speed up business deliveries for numerous industries. Supermarkets have experimented with drones in recent years to test their viability for cutting costs and meeting delivery deadlines. Here's what you should know about drone business insurance if you decide to work with this emerging technology.
The main risk for including drones in your business involves liabilities in case the drone causes damage. But there are other risks to consider, such as cyber liability in case of a data breach, privacy issues, and other regulatory issues specific to unmanned aircraft vehicles (UAVs).
The Federal Aviation Administration (FAA) defines a drone as a type of aircraft, meaning it must comply with federal air traffic laws. Drones may be considered exclusions in certain aircraft insurance policies. Drones are currently advancing technologically at a faster pace than regulators can keep up with.
In 2023 there is still no law or FAA regulation that requires a business to purchase drone insurance. But that doesn't mean you should forget about insuring commercial drones.
As proof of insurance, business clients may require a certificate of insurance if you use drones. It's important to not just assume a general commercial liability insurance policy will cover drones when it probably won't due to aircraft exclusions.
Two key plans to explore are commercial drone liability insurance and commercial drone hull insurance. Both plans provide coverage for drone accidents related to your business.
Payload insurance is another type of drone coverage that's useful if you have expensive equipment on your drones, such as cameras and lasers. It pays for damage to your drones. Here are other types of coverage to consider if you own drones:
Drone violations and patent infringement cases have made the news. The FAA, for example, sued SkyPan for its aerial drone photography over restricted areas. The company paid a fine of $200,000.
In another drone case, California-based drone photography firm Hollycal Productions, Inc. was sued by a wedding guest who lost eyesight due to looking at a drone's laser. But the firm did not have to pay a settlement due to their policy's aircraft exclusion.
The cost of drone insurance depends on multiple factors, including the type of drone, the type of drone business, and the experience of the drone operators. Other factors that affect drone insurance rates include your deductible, claims history, and location.
Generally, it's possible to lose drone coverage if you fail to log flights or display proper identification on the aircraft. Your insurer will have the final say in whether you lose coverage.
Investing in drones can be a worthwhile venture if you secure the right insurance for them. To get help figuring out the specifics for covering your drone business insurance, contact our insurance professionals at Kneller Insurance Agency today. We are happy to help you gain a deeper understanding of drone coverage.
