You are not required to have unmanned aircraft system (UAS) insurance in the U.S. However, the reality is that drones can easily become involved in accidents, and if you injure someone or you damage someone’s property, you could be subject to an expensive lawsuit and resulting damages if you lose your case in court. Further, drones and their related equipment (i.e., expensive cameras, ground equipment, etc.) can represent a significant cash investment and it only makes sense to protect yourself against loss or damage to such equipment.
In addition, if you plan to operate your drone commercially, most clients will require that you have proof of liability insurance coverage before they hire you for a job or before they accept you as a preferred vendor. Even if a potential client doesn’t require that you have insurance, the fact that you have liability coverage may mean that they will hire you over someone else.
Types of Coverage
UAS insurance is similar to car insurance in that you can select the types and amount of coverage that you feel works best for your individual situation. Set forth below is a general list and brief description of the types of drone insurance coverage that you may want to consider:
- Liability Coverage – Liability coverage protects you from property damage and bodily injury claims that may arise during the commercial operation of your drone. Typically, liability limits start at $500,000, although liability coverage limits can be as high as $10,000,000 per occurrence.
- Hull Coverage – Hull coverage is designed to protect you from financial loss from any physical damage that may occur to your drone. This type of coverage is generally based on a “stated value” of your UAV, or the current market price of your UAV when you obtain the coverage.
- Payload Coverage – Payload coverage protects you from loss or physical damage to payload equipment such as cameras or sensors that are designed to be carried on your drone.
- Ground Equipment Coverage – Ground equipment coverage protects you against loss or damage to ground equipment such as dedicated ground stations, laptops, tablets, UAV cases, remote controllers and other related equipment associated with your UAS.
- Non-Owned Coverage – There are several types of non-owned coverage that can be added to your UAS insurance policy including: (i) non-owned UAV liability coverage; (ii) non-owned UAV hull coverage; and (iii) non-owned payload coverage. A brief description of each type of non-owned coverage is set forth below:
- Non-owned liability coverage protects you from any claims of property damage or bodily injury that is caused by your operation of a drone that you do not own.
- Non-owned UAV hull coverage protects you from any claims of physical damage caused by your operation of a drone that you do not own.
- Non-owned coverage payload coverage protects you from any claims of payload loss or damage that is caused by your operation of a drone that you do not own.
- Personal Injury – Personal Injury coverage covers you against legal actions alleging libel, slander, violations of privacy and copyright infringement.
Insurance companies want to mitigate their risk as much as possible. So, when they are reviewing your application for UAS insurance, insurance companies may look at some of the following criteria:
- Your flight experience or number of hours of flight time.
- Whether or not you keep a maintenance log.
- If you are an FAA licensed drone pilot.
- Cost of your equipment.
- Content on your website.
- Your marketing materials.
- Capability to automatically record your flight log and data.
- Nature of flight services you plan to provide.
- Type of advanced training you have received.
- Prior accident record.
Obtaining UAS insurance is similar to auto insurance, where insurance companies are generally looking to insure those persons with years of driving experience, a clean driving record, no accidents, etc. Although persons who are new drivers, have tickets or accidents on their record, own high performance sports cars, etc. are still able to obtain auto insurance coverage, they most likely are going to pay higher premiums for their coverage.
The amount of UAS insurance premiums will vary depending on factors such as the dollar amount of liability coverage and other types of coverage you add to the policy, your experience, amount of flight activity, etc. A commercial insurance policy carrying $1 million of liability may cost in the range of $500-$750 a year, more or less. Further, depending on the types of coverage that you choose, there may also be deductibles of between 5% and 10%, more or less.
However, if you are just starting out, or you do not fly on a regular basis, you may want to look into using an on-demand drone insurance company where rates for $1 million of liability coverage may cost in the range of $5-$10 per hour, more or less.
On-Demand Insurance Providers
The companies below offer on-demand insurance on an hourly basis:
Drone Insurance Brokers
- Aerial Pak (Hill & Usher) – https://www.aerialpak.com/
- Aviation Insurance Resources – https://air-pros.com/uas-uav/
- AVION Insurance – https://www.avioninsurance.com/uav-drone-insurance/
- Bullock Agency, Inc. – http://www.bullockagency.com/
- BWI Aviation Insurance – https://bwifly.com/
- Costello Insurance – https://www.aviationi.com/
- Driessen Assuadeuren (aka Drone-Insurance.com) – http://www.drone-insurance.com/
- Droneinsurance.com – https://droneinsurance.com/
- Full Frame Insurance – https://www.fullframeinsurance.com/drone-insurance/
- Kinney Pike Insurance – https://www.kinneypike.com/drone/
- MFE Insurance (aka InsureMyDrone) – https://insuremydrone.net
- SkySmith – https://www.skysmith.com/
- Skyvuze – https://skyvuzetech.com/
- Sutton James Incorporated – https://optisure.com/about-us/partner/sutton-james
- Transport Risk Management – http://www.transportrisk.com/
- UAV Protect – https://uav-protect.com/
- Unmanned Risk Management – http://unmannedrisk.com/
Drone Insurance Underwriters
- AIG – https://www.aig.com/business/insurance/specialty/unmanned-aircraft-system/
- Allianz – https://www.agcs.allianz.com/
- Global Aerospace – https://www.global-aero.com/
- Lloyd’s – https://www.lloyds.com/
- Starr Aviation – https://www.starrcompanies.com/
- SwissRE – https://www.swissre.com/
- USAIG – https://www.usau.com/coverages/unmanned-aircraft-systems/
- AXA XL – https://axaxl.com/