Drone Insurance Guide

How does drone insurance work?

Drone insurance covers the commercial use of unmanned aerial vehicles (UAVs) or, as they are now referred to in Australia, remotely piloted aircraft (RPA). If your drone is lost, damaged or causes loss, damage or injury to others, drone insurance covers your liability costs to a certain extent, depending on the policy.

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What about recreational use?

In Australia most drone insurance policies are designed for commercial purposes only. However there are a few insurers that offer cover for recreational use. Note: if you operate a drone recreationally, you're still subject to most of the regulations applying to commercial drone operation.

What types of cover are available in Australia?

In Australia, drone insurance covers two main areas:

• Public liability. This provides cover up to $20 million against third-party damage and bodily injury claims arising from the operation of your drone.
• Vehicle & equipment. This is an agreed value for loss or damage of your drone and operating equipment (often including payload).

In America, where commercial drone insurance is more widespread, cover can include a bigger range of options such as liability, hull (the drone), payload, ground equipment, non-owned coverage (borrowed or leased drones) and personal injury cover (copyright and privacy infringements).

What types of accidents or liabilities are covered by each policy?

Examples of potential accidents involving drones where drone insurance would be beneficial to have include:

• Loss or damage of the drone due to loss of control resulting in a crash
• Damage or injury caused during the crash to third party property or persons
• Damage or injuries caused to operating equipment, ground crew or onlookers

What affects the cost?

As with any form of insurance, certain risk factors determine how much an individual will pay for drone insurance. When preparing your application for underwriting, your broker will consider some or all of the following factors to determine how much your drone insurance is likely to cost:

• The number of flying hours you have logged (in aviation, flying hours equates to experience and operational competency)
• The cost of your drone and equipment (needed for agreed value cover)
• The size and weight of the drone you are operating (weight classifications in Australia include micro (100 grams or less), very small (100 grams - 2 kilograms), small (2-25 kilograms), medium (25-150 kilograms), large (over 150 kilograms)
• Whether you are able to automatically record your flight log and data (required evidence when claiming)
• Whether you keep a maintenance log and regularly maintain your drone and equipment
• Whether your drone is owned or leased
• Where you are operating your drone (ie over water, near built-up areas, around hazards such as power lines etc)
• Whether you have any previous history of drone accidents or loss

Who offers drone insurance?

The following brokers and insurers offer public liability, UAV and equipment cover:

Insurance exclusions to be aware

To retain your drone insurance cover, you must always operate your drone in a manner approved of by your insurer. Exclusions from cover may include;

• Not logging flights and not being able to prove with flight log data what happened during an incident
• Operating your drone recklessly or in contravention of air safety regulations
• Not registering your drone if it weighs more than two kilograms and not displaying proper identification numbers
• Not logging battery cycles and maintenance changes

What regulations will you need to follow in Australia if you fly a drone?

Whether you operate your drone commercially or for recreational purposes (unless it is a very small drone being operated over private property), you must always observe the Civil Aviation Safety Authority (CASA) Regulations which require that you:

CASA has developed the following web- and app-based resources to help you better understand the rules:

• Know Your Drone: A website that outlines the rules in easy-to-read infographic-style format, along with informational videos and tips & tricks.
• AirMap for Drones: An app for Android and iOS that uses air-traffic-control data from Airservices Australia. It uses a convenient interactive map that shows users where they can and can't fly their drones.

Frequently asked questions

• Is drone insurance compulsory?

  The commercial use of drones is still a relatively fledgling industry, which is why drone insurance is not yet compulsory in many countries including Australia. But as usage increases it is only a matter of time before it becomes mandatory. In the meantime, having drone insurance will protect your business if the unforeseen were to happen.

• What are the penalties for breaching drone safety laws?

  CASA issued more than 42 fines for illegal drone use in 2019, with that number expected to climb in the coming years as drones become more and more popular. Depending on the severity of the breach, fines can reach up to $1,110 per offence. If the breach requires court intervention fines can reach up to $26,640 and two years jail time. States and terrirtories may have extra regulations and fines that apply to drones.

• Why should I consider a broker?

  Because drone insurance is such a specialised field, it can be beneficial to hire the services of a broker, rather than buying your insurance directly. Not only does a broker often have access to data you are not privy to, but their sole purpose is to find the right insurance fit for your situation and budget.
  By putting together a tailor-made package for you, they can help you avoid paying for cover that you don't need and ensure you are adequately covered for the things that you do.

• How do I make a drone insurance claim?

  Making a claim on your drone insurance is much like claiming on a motor vehicle or home insurance policy. Follow these steps to simplify the process:

  • Notify your insurer as soon as possible after the event.
  • Make a note of the time, place and type of incident and the contact details of those involved including any witnesses.
  • Notify the proper authorities if relevant (ie police or ambulance).
  • Do not make any statements without the insurer's permission.
  • Do not abandon your drone or equipment and take all reasonable precautions to protect it after the incident.
  • Allow the insurer to inspect the damaged property prior to repair or disposal.
  • File your claim within the prescribed time frame and cooperate fully with the insurer.