With public interest in drones skyrocketing and many people buying drones for the very first time, accidents can and will happen—and that’s why there is now drone insurance. Drones are some costly, valuable pieces of tech, and it makes sense that amateurs or businesses that utilize drones would want to insure and protect them in case damage befalls them. Case in point, Tom Kilpatrick, founder of CloudDeck Media and a Federal Aviation Administration (FAA) licensed drone pilot who has insured his drone for $1 million.
Many insurance companies have been providing drone insurance for a while now, but now that drone ownership is open to everyone, the risks will obviously increase. According to one report discussing insurance in the drone industry, the drone industry could be worth $89.1 billion over the next decade, and these drones will need coverage. Citing the conservative nature of the drone industry, companies looking to insure drones could possibly enact stricter guidelines than the FAA itself.
While the scope of coverage is still a work in progress, several types of insurance coverage regarding drones have been discussed as mandatory by insurance experts in the drone industry. Liability coverage (protection from personal injury and invasion of privacy), property coverage (which covers production, assembly and wholesaling) and workers’ compensation (to protect those working for and in the facilities of drone-related businesses) are among the issues discussed regarding drones.
Since the majority of drone businesses are startups funded by investors, there’s significant risk of financial loss due to operational mismanagement. This would also prompt liability insurance for directors and officers of these companies as well. Another factor to consider is that if carriers are hit with death or serious injury claims, several insurance companies could withdraw, and the consequences include less available coverage for drones and higher premiums.
“A new toy brings about new problems,” said attorney David Slane. “Parents in particular need to realize they’re responsible for their kids. This is kind of like the baseball through the window, now it just may be a drone through the window.” You don’t have to go all out and place a $1 million insurance plan on your drone, though. There are cheaper alternatives like a membership to the Academy of Model Aeronautics for only $75 a year, which includes drone insurance.
For homeowners, home insurance could also cover a drone accident as a property claim, or your insurance agent could also add coverage for drones if it is not explicitly stated in the homeowner’s policy. Kilpatrick said, however, that if you choose not to get drone insurance, you should read the manual (an adage that spans way beyond drones as well) and know what you’re doing. “Be familiar with what you’re flying and be familiar with your environment.”