April 11, 2016
Drone insurance is a fairly new product on the insurance market. Drones are expensive, so it makes sense to protect your investment. On the other hand, drones are considered unarmed areal vehicles (UAV) or unarmed aircraft systems (UAS). This means that they can become a liability if your drone crashes and injures another person or damages their property. If you own a drone, you should definitely think about drone insurance. Here are a few tips to help you determine whether you need one.
What kind of drone do you own?
The recent boom in drone popularity brought on a bit of confusion in terminology. What most consumers consider “drones” and what advertisers market as “drones” are not drones in the traditional sense. A real drone (UAV or UAS) has an autopilot function and can fly without any user input. You can program a course and the drone will complete it. If this is the kind of drone you own, then you might want to consider both registering and insuring it. If you own a drone operated with a remote control (RC drone), then you generally shouldn’t need insurance, at least not for recreational use, which brings us to the next question.
Are you flying commercially or recreationally?
If you purchased a drone just for fun, then you likely don’t need drone insurance. However, be sure to check with your homeowners’ insurance first. Many homeowners’ policies provide general liability coverage for drones, but you need to check to know for sure. Because drones haven’t been around for that long, some insurance providers may not have included them in their policies yet or had to deal with drone-related claims.
If you are flying drones commercially with the purpose of financial gain, you definitely need drone insurance. You are probably using your drones to carry some sort of cargo or record video, so you want to make sure that both your equipment and your cargo are protected and that any associated liabilities are covered.
Are you flying indoors or outdoors?
Let’s say you have a commercial drone that you use indoors in an exhibition hall or a concert venue to get areal footage of your events. Do you need drone insurance in that case? Theoretically, yes, you may still want to protect yourself in case your drone malfunctions, falls and injures one of your venue’s guests. However, not all drone insurance providers offer liability coverage for indoor use, so you may want to work with your drone insurance agent to figure out the best policy for your needs.
Do you serve as a vendor to others?
If you serve as a vendor to other businesses or individuals, they may want to see a proof of insurance before they do business with you. For example, if you are a video production company using drones for areal footage, your clients might feel better about hiring you if they know that you have the minimal required insurance. In addition to that, if you have to request permits to film in certain locations, you may also be asked to show proof of insurance.
When you need Drone Insurance
To sum up everything we’ve discussed above, you need drone insurance if you plan on using your drone(s) outdoors for commercial purposes. Recreational use within your property limits or in approved locations is generally covered under homeowners’ insurance, but please be sure to check with your provider first. Besides insurance, you will also need to apply for an approval to operate your drone commercially, as well as become or hire a licensed drone operator. Drone insurance provides coverage for specific drone use performed by specific operators. If you have any questions about commercial drone insurance or requirements for commercial drone use, feel free to get in touch with our insurance experts at American Heritage.