Getting drone insurance is a smart move if business is being conducted.
If you’re making money with your UAV, or you plan to in the future, insuring it could save you a lot of money down the line if an accident happens.
And let’s face it, UAV technology isn’t perfect. Fly-aways beware!
Getting drone insurance may also help you close clients (who may not want to work with you unless you’re insured). If anything, you’ve got peace of mind knowing that you’re covered in the unlikely event of an accident.
Insuring your drone is a relatively new concept.
Over the last several months, I’ve been getting a lot questions about how to get insured, what’s covered, how much it costs, and the options available.
First of all, do you even need drone insurance?
If you want to be insured, your homeowner’s insurance likely does NOT cover use of your drone, even if you’re just operating recreationally in your own backyard.
Some companies will only insure you if plan to pilot your drone commercially as a professional pilot.
In the U.S., UAV insurance is not currently required for either recreational or commercial RC drone use. In Canada, though, if you’re operating commercially you must be covered for at least $100,000 liability.
In some instances, you might need a minimum level of insurance coverage to take on a project, whether it’s needing to secure a city film permit, or working with a larger company that requires insurance for each of its vendors.
At the end of the day, all serious UAV pilots have liability insurance. It’s a strong, credible indicator for your business prospects. Insurance shows that you’re professional and reputable.
For those who plan to fly commercially, this guide covers:
Let’s get started!
Drone insurance acts like any other insurance policy. If you lose your drone or get into an accident, the company will cover your damage and liability costs to a certain extent.
Insurance companies want pilots to have operating manuals, maintenance logs, and a record of parts or add-ons they’ve purchased. These items, along with proof of training or of planning to get trained, indicate that you’re a safe flyer or want to become one.
This lowers the amount of risk you pose to your drone, other people, inanimate objects, and to the insurance company’s costs. The safer and more prepared you are, the more likely you’ll be to obtain insurance and get a desirable rate (similar to car insurance).
Here’s a list of potential uses (operations) a company could insure you for:
Source: Unmanned Risk Management
In aviation insurance, the base policy is liability only. This coverage must be purchased prior to adding any other type of coverage.
Think about it like the foundation of the UAS insurance policy. This coverage will protect the business from Property Damage and Bodily Injury claims that may arise through the commercial operation of UAS. Typically, liability limits start at $500,000 and usually can be negotiated to as high as is required by the business and its clients (limits as high as $10,000,000 per occurrence are not unheard of in UAS insurance).
However, each company may or may not offer you certain limits based on their underwriting criteria. It is often argued that liability is the biggest concern of any business, especially one that operates aircraft.
Generally, the next coverage to consider after liability is “hull” coverage.
Hull coverage’s purpose is protecting the business from the financial cost from any Physical Damage that may occur to its UAV(s). Typically, this coverage is quoted on an “Agreed Value” basis. The business owner, their broker, and the insurance company will agree upon a value and quote the UAV based on that valuation. However, it is very important to make sure that the UAS’ value is accurate.
If a UAV was purchased in early 2015 for $1,500, the market value is most likely not the same in 2018. Not keeping up with the declining value of UAVs will lead to overpaying for insurance, problems in the claims process, and overall dissatisfaction with the insurance carrier. If your UAV is totaled, the insurance company will cut you a check for the insured value of the UAV minus any applicable deductibles (deductibles on a UAV policy are usually between 5% and 10% of the insured value of the aircraft depending on the insurance policy).
However, some companies will adjust the value of the aircraft to reflect the current market price (example: you cannot insure a DJI Phantom 3 for $6,000 and expect to get that amount in the event of a claim). This is another reason why it is important to have the stated value be in line with the current market price of your UAV.
Depending on the type of UAS that is operated, another option to consider is payload coverage.
If a business owns multiple cameras or sensors, that are designed to be carried by a UAV, payload coverage is very important. This coverage is similar to the above Hull coverage, except it is specifically designed for payload equipment. This coverage is designed to protect the insured from any Physical Damage losses to a scheduled payload. Again, a similar deductible of between 5% and 10% of the insured value of the equipment will be applied to payload items.
For this type of coverage, an insured does not simply want to “lump” the value of the payload in with the hull coverage on the UAV. These items should be scheduled separately. Just like the hull coverage, it is important to accurately insure the value of the payload. An example of how the scheduling should look on the quote/binder/policy is provided below.
2018 DJI Inspire 2 – S/N 0DDX091356F9 – $3,000 (Insured Value)
2018 DJI Zenmuse X5S – S/N 0DDP4987321 – $1,899 (Insured Value)
2018 DJI Zenmuse X5R – S/N 0DDF2345697 – $3,199 (Insured Value)
Ground equipment such as dedicated ground stations, laptops, tablets, UAV cases, remote controllers, and other items associated with an insured UAV can be added to insurance policies. Similar rates and deductibles to the hull and payload coverage should apply to the ground equipment.
There are a few types of Non-Owned coverage that can be added to a UAV insurance policy. The first is Non-Owned UAV Liability coverage. This coverage is designed for a business that operates UAVs that are not owned, or leased for a significant amount of time, by the Named Insured. Non-Owned UAV Liability coverage will protect the business from any claims of Property Damage or Bodily Injury that may arise from their use of a Non-Owned UAV (but not physical damage to the non-owned UAV itself). If Non-Owned UAV Liability coverage is added to a policy, it typically follows the liability limit of the owned aircraft. If a business is ever asked to operate a UAV that is owned by someone else, Non-Owned Liability coverage is something for them to consider.
A second Non-Owned UAV coverage to consider is Non-Owned UAV Hull coverage. This coverage, just like the “owned” Hull coverage, is coverage for Physical Damage to the non-owned UAV(s) operated by the Named Insured. The Named Insured generally selects a limit for this coverage. So, if a Named Insured generally operates a DJI Inspire 2, equipped with a DJI Zenmuse X5S Camera, that is not owned by that Named Insured, they should consider adding Non-Owned Hull coverage in the amount of $4,899 ($3,000 for the Inspire 2 and $1,899 for the DJI Zenmuse X5S).
A third Non-Owned coverage to consider is Non-Owned Payload coverage. Again, this coverage works in a similar fashion to the “owned” Payload and Non-Owned Hull coverage described above. If a Named Insured operates an Owned 2016 Freefly Alta, and commonly carries RED cinematic cameras owned by the production companies that hire them, Non-Owned Payload coverage is a must (these cameras, equipped with certain lenses, can sometimes be valued around $100,000!). Or, if a Named Insured preforms aerial inspections, using expensive sensors not owned by that Named Insured, Non-Owned Payload coverage is, again, crucial. Some insurance companies add this coverage on a case by case basis. In that situation, the Named Insured will Other companies allow you to set a coverage limit and add a “blanket” endorsement to the policy.
Personal Injury coverage is a relatively new offering in the UAV insurance world. This type of coverage is for libel, slander, violation of privacy, and copyright infringement. The most important portion of this coverage is the violation of privacy language. With the negative portrayal of UAS in the media, and the population’s irrational fear of flying cameras, it is a good idea to consider this type of coverage.
A big thank you goes out to Joe Ernster of Bullock Agency, Inc. for providing us with this list and in-depth information regarding types of coverage.
A commercial insurance policy for something like a DJI Phantom 4 covering liability up to $1 million can run as little as $500-$750 a year (depending on volume, experience, and background).
Or if you use a company like SkyWatch, an on-demand drone insurance company, you can get $1 million in liability for as little as $5-10/hour.
Please note that these are general numbers from our research. You will need a unique quote from an insurance company to know exactly how much you will be covered and what it will cost.
Each company structures their policies a little differently. Some include hull insurance, others do not. Do your due diligence and chat with a number of companies before moving forward.
Here are a few things that your insurance broker may consider when putting together your application for the underwriter:
Also, have you completed some kind of drone pilot training? (Not required to have gone through any kind of program or degree; they’re looking for experience and being able to demonstrate operational competency.)
To get a quote, go to an insurance company’s website, find the “get a quote” form, and fill it out.
Here’s some info you’ll need to have handy:
Check out this form from Aviation Insurance to see what information a company might ask you for in the consultation stage.
Alternatively, you can download SkyWatch’s app and get a quote from them for on-demand coverage.
Once you’ve obtained multiple quotes, you can compare prices and coverage. This will help you decide which company is offering you the best deal.
They’ll guide you through the rest of the procedure.
Can you lose your insurance?
Yep, here’s a few reasons why you might get dropped from your provider. Every provider has its own exclusions, and it’s important to understand what they are.
Here are a few we’ve heard about:
The below companies all offer drone, UAV, UAS, and quadcopter insurance coverage.
In alphabetical order, here’s a list of drone insurance brokers that can help you find the best sUAS insurance policy for you and your company. This list is particular to the United States, and some of the companies listed are very specific to the drone industry, while others offer more diverse business products to their clients.
Not ready to work with an insurance broker to negotiate an annual policy? Check out both SkyWatch and Verifly, two companies that offer on-demand insurance where you pay by the hour. A low-cost alternative for folks just starting out.
The team over at ArcadiaSky maintains a separate list of insurance providers outside of the U.S., particularly drone insurance in Australia and in the U.K.
And finally, a quick word about what an “insurance broker” actually is, written by the team at Kinney Pike Insurance:
Brokers have access to a broad range of coverage for their clients. By working with a drone insurance brokers, you’ll often find insurance professionals dedicated to securing the right product for your specific needs. Brokers value their relationships with their clients, and often have multiple resources and extensive expertise to address the unique insurance market and, risks and coverage you face. Brokers work closely with insurance companies/underwriters and carefully choose and secure the best coverage at a competitive price for their clients.
Here’s a general outline from Unmanned Risk Management:
Hopefully this guide has given you everything you need to understand drone insurance and begin the process.
Remember, you might be covered by your homeowner’s insurance if you’re only flying recreationally, but make sure to confirm this before continuing to fly.
If you’re a commercial pilot, getting insured is highly recommended to protect you and your business.
Here’s an interview we did with the CEO of Verifly, Jay Bregman:
Questions? Feel free to email email@example.com.
Happy to help where we can.