Whether you’ve purchased a drone for commercial use or you’re simply a hobbyist who has made a considerable investment, you need to determine what type of drone insurance coverage you need for your aircraft. Don’t assume your extensive experience flying is enough to protect your investment.
This guide to drone liability and hull insurance explains what drone owners should know about these two types of drone coverage to protect their aircraft and adequately protect themselves from liability.
Is Drone Insurance Required by Law?
At this time, drone owners and operators in the United States are not required to carry any type of drone insurance. Even for commercial drone use, the FAA does not mandate any rules or laws that drones must be insured. This could change as drone use becomes more common, but you do not have to be insured currently. But that doesn’t mean you shouldn’t be insured.
There are many reasons to carry drone insurance regardless of legal requirements. Business owners who use drones commercially should consider a commercial drone insurance policy, just like any other business insurance designed to protect your company’s assets and minimize liability exposure. Additionally, some clients and other third parties you may encounter while doing business may require proof of drone liability insurance before hiring or working with you.
Does General Business Liability Insurance Cover Drones?
Most business owners carry general liability insurance. While this coverage can vary between insurers, most will not cover damage caused by the drone, damage to the drone or liability claims regarding privacy. Most general liability policies have an aircraft exclusion, which would also exclude drone coverage. Typically a business will require a policy specifically for drone coverage.
Does a Renters/Homeowners Insurance Policy Cover a Drone?
For recreational drone owners, physical damage to your drone or theft of the drone drone is considered personal property and may be covered under your renter’s or homeowner’s insurance policy. Your home insurer can advise you on the type of coverage you have. Your policy may have limits or a deductible that does not make it cost-effective to use for drone coverage.
Remember that a claim on your renter’s or homeowner’s insurance will likely cause your insurance premiums to go up. Once again, having actual drone insurance might make better financial sense for recreational drone owners with an expensive setup or who fly frequently.
Primary Types of Drone Insurance
Drone owners should consider two primary types of coverage: drone liability and hull or physical damage insurance. Here is an explanation of what each type covers and why they are essential for commercial drone owners to carry.
Hull insurance covers damage to the drone itself and may or may not include equipment attached or accessories. You should know what is and is not covered to ensure adequate coverage. Sometimes an additional type of insurance is necessary to protect extra drone-related equipment.
Most hull insurance policies will cover the total cost to replace or repair your drone, including labor costs for repairs.
Without hull insurance, you are fully responsible for the cost of repairing or replacing your drone. Mistakes and accidents happen regardless of how skilled you are and how many flight hours you have logged. You often have no control over equipment failures or other factors that can damage your drone. Business owners especially should carry hull insurance. You’ve probably invested quite a bit in your drone, and you could lose business revenue or your business if you don’t have the money to repair or replace your drone.
Most drone insurance policies that have physical damage coverage, will have 5% deductibles.
Perhaps more critical than hull insurance for any drone owner, whether recreational or commercial, is drone liability insurance. Drone liability insurance is much like auto liability coverage. It covers injury to others and damage to other people’s property caused by your drone.
For commercial drone owners, drone liability coverage is typically required by companies who hire you. While a third party might not care about any damage to your drone, they do care about damage to their property or any injury you may cause someone while performing work for them.
Like auto insurance, you can choose your liability coverage limits. The type of work you perform and where you perform it will determine coverage limits. A drone insurance broker can help you decide how much you should carry.
While drone liability coverage may be required for commercial drone owners to do business, recreational owners should also seriously consider carrying liability insurance. Once again, it is not just about how skilled you are at drone operation. An equipment malfunction could drop your drone onto someone’s car or their head. At a minimum, you would be responsible for repairs of any property damage or medical bills. If they were to file a lawsuit, you could be looking at legal fees and personal financial exposure.
Privacy concerns are also an issue for any drone owner. You must fully understand laws and rules wherever you fly your drone. Drone liability insurance can protect against invasion of privacy and similar claims if you are sued.
Other Drone Coverage Businesses Should Consider
Hull and liability insurance are the two primary types of drone insurance most owners should carry. However, if you use your drone to carry an expensive camera or have expensive ground equipment you use with your drone, you might want to consider payload coverage or coverage for your equipment.
Information Needed for a Drone Insurance Quote
The best way to find out about the type of drone coverage and limits you should carry is to speak with a knowledgeable drone insurance broker. Before contacting a drone insurance broker for a quote, you’ll want to have the following information handy:
- The type of drone coverage you need – hull, liability, non-owner, etc.
- The cost of your drone and related equipment
- Specific details on the drones you have, such as make and model numbers
- The number of flight hours you have
- Verify that you have your part 107 license, which is required for a commercial drone insurance policy.
- Any drone training you have
- Any previous claims of drone accidents or other losses
- Where you operate your drone and how you use it
How to Get Help Determining Your Drone Liability and Hull Insurance Needs
Whether you earn a living with your drone or are simply a drone enthusiast, you want to ensure your investment is protected and you’re covered for possible liability claims. Enlist the help of a trusted broker who can make sure you have the right amount of coverage without overpaying. A broker can explain what is and is not covered by drone liability and hull insurance so you can best determine your needs.
BWI Aviation Insurance is here to answer any questions you may have. We provide pilots with drone policies best suited for their needs at the best price. Contact our team now and get a quote.
Why choose BWI Aviation Insurance?
Over our 42 year history, BWI has built longstanding relationships with all of the above Aviation Insurance Companies. We work hand in hand with the above companies and leverage our experience to find the best market for your particular airplane insurance risk.
To ensure that you are getting the absolute lowest rate and best coverage with a rock solid A+ rated Aviation Insurance company, get a quote with BWI today. We specialize only in Airplane Insurance and our office is open 12 hours a day. Our agents are friendly and knowledgeable, and most importantly they are agents that you can trust to get you the best coverage for your needs. Aviation Insurance is all that we do and have done for 42 years.
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