Drone Insurance and Liability Coverage: Do You Need It?

Affordable premiums and potential industry risks have resulted in a growing need for drone insurance.  So, should you bear this additional cost? How do you zero in on the right insurance policy? And, how do you ensure that you get the lowest premium and maximum coverage? In this article, I provide insights in this important but often ignored topic.

Should you get drone insurance?

A number of things may go wrong while you are out flying your drone.  You might run out of battery voltage before you can bring your drone home. Or, you might crash into a bird. Or maybe a shabby propeller may come off and cause failure. Take a look at some of the prominent drone crashes of 2017:

Prominent Drone Crashes of 2017

So, while your drone may not cost more than a couple of thousand dollars, it can potentially cause damages to the tune of millions of dollars. Being insured not only protects you from liability and damage but also increases the likelihood of getting more work.  If you are working for large corporations, drone insurance is often a de-facto requirement. Larger organizations are known to demand a $ 5 million Combined Single Limit (CSL). While, the average policy limit is $ 1million CSL.

The Different Types of Drone Insurance and their Providers

Liability insurance forms the biggest component of your policy. Typically for a million dollar policy, you will end up paying $650 towards liability insurance. And whole insurance is the cost to replace your vehicle.  Roughly, whole insurance will cost you 10% of insured value.  An “all risk whole basis” policy will cover lost and stolen UAV’s as well. This article explains in great detail the different kinds of drone insurance and their features.

There are many companies offering drone insurance.  Global Aerospace, Coverdrone and Insure My Drone are some of the popular options.  You can also opt for DJI Care Refresh or DJI Care. DJI Care Refresh is valid for a year and your drone can be replaced a maximum of two times in this duration.  DJI Care is the insurance plan offered by DJI for their older models.

On-demand, hourly insurance by Verifly has become quite popular of late. It is important that you are aware of the various disadvantages of hourly insurance before opting for it. For instance, if you avail insurance at the last moment, getting your certificate of insurance is going to be a problem.  Verifly also assumes that you are a legal pilot. So, if you do not have proper certification, your policy is void. Another issue is that lot of locations do not have good cellular data. This can prove to be an hindrance if you plan on purchasing hourly insurance at the last moment.

How can you save money on drone insurance?

Your flying experience and the nature of your work are the two predominant factors that determine your insurance premium.

Experienced pilots can avail a lower premium. So make sure you get some flying hours under your belt before buying insurance. Potential risk varies greatly according to the nature of your work. And the premium that you pay is directly proportional to the risk involved. For instance, if you are taking up Ag jobs, the risk of hurting anyone is minimal. As against that, the potential risk is far greater if you are taking up jobs such as power-line and oil & gas inspections.

Oil and Gas attracts higher insurance premiums

If you own a fleet of drones, you can certainly negotiate a lower premium. Premium for a single, standalone drone will be much greater.  For instance, Global Aerospace is known to offer attractive premiums when you ensure a drone fleet.  They offer an Open Pilot Policy wherein multiple Part 107 certified pilots can operate under a single RPIC.

Opting for an insurance company that offers drone specific insurance is another money saving trick that you can employ. Traditional insurance companies are known to offer an inland marine policy that provides drone coverage. But, this will likely prove to be a costlier option.

A good insurance broker will update you with the minutest of details. And he will also suggest all possible alternatives. This due diligence goes a long way and helps in negotiating the best premium. Remember that drone insurance is negotiable and you need to haggle for it. Getting multiple quotes will also help you get the best possible deal.

Are you eligible for drone insurance?

To be eligible for drone insurance, you need to fulfill certain requirements.  The first and most obvious one is that you need to be Part 107 certified.  The insurance company is not liable to honor a claim if you do not have your certification. Check out this FAA link for all Part 107 requirements.

You also need to make sure that your drone is registered with the FAA. Go here to register your sUAS. Apparently pilots run into registration issues if they have availed insurance from DJI Care Refresh. If your crash your drone and it is beyond repair, you might receive a replacement drone with a different serial number.

If this replacement drone is registered under someone else’s name, you cannot claim damages under your insurance policy. Likewise, if DJI sends a drone registered under your name to someone else, you are liable to any damages in the event of a crash.

Conclusion

Many drone owners, especially new entrants shy away from spending that extra grand towards drone insurance. However, a solid policy providing maximum coverage will shield you from liabilities. Do your due diligence before zeroing in on an insurance provider. Remember to use the money savings hacks that I talked about to get lower premiums as well as wider coverage. And lastly, always ensure that your paperwork is in order so that you are legally entitled to any potential damages.

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