Determining whether you have all the correct types and amounts of insurance for your drone business can get tricky. Drone companies face unique risks that don’t apply to other businesses or industries and require additional insurance.
So while your business will still need much of the same general business insurance every business must carry, these policies typically do not cover drones. They don’t cover damage to your drones or drone payloads or liability claims of injury or property damage from a company drone. However, your standard business policies may cover your drone if it is stolen or damaged in a fire while stored at your office. So knowing what is and is not covered by each policy you carry is crucial to ensuring adequate coverage.
Here is how to correctly insure your drone business.
Laws Regarding Drones and Insurance
In the U.S., the FAA does not have any laws requiring insurance for drone use. This includes business and recreational use. While a hobbyist can avoid carrying drone insurance, a business should carry it regardless of what the law requires.
Commercial drone insurance can protect your investment in expensive drones or payloads, such as cameras and other equipment. It can also reduce your liability exposure if something goes wrong with a drone that hurts someone or something.
Proof of Insurance for Drone Companies
Most clients who hire your company for drone services may want proof that you have liability insurance. It is common practice when hiring a company whether or not a drone is involved.
Some may assume that general liability insurance will cover damage or injury that may occur from your drone. This is a common misconception. Most general liability policies exclude aircraft, which means damage or injury caused by your drone would not be covered. So at a minimum, you’ll need proof of drone liability insurance to do business.
Insurance Considerations for Every Drone Business
Every industry faces unique risks and often requires specific insurance coverages, which is no different for drone companies. Here are some of the risks specific to your drone business.
Liability Risks
Every business must protect against liability risks – injury of clients and third parties and damage to others’ property. Drone businesses are no different but require additional coverage beyond general liability policies most companies must carry.
Privacy issues also create a liability risk, especially for companies that have cameras attached to their drones.
Cyber Security Risks
Cyber security is another risk most businesses face in our electronic world, but drone companies face a unique cyber security risk. Someone could potentially get control of a company drone and crash into something or someone. Your company would be liable for any damages.
International Risks
If your company operates drones outside of the U.S., you must ensure your coverage extends outside of the United States. Determine insurance requirements for any country in which you operate.
Correctly Insure Your Drone Business: Recommended Coverage
At a minimum, drone companies should get the following three drone insurance policies to ensure coverage for damage to equipment and liability claims that could arise:
Drone Liability Insurance
If your company drone sue accidentally causes injury or property damage to third parties, commercial drone liability insurance will cover any damage, medical costs and legal fees. This policy will also cover privacy claims if flying your drones near or over public property.
Drone Hull Insurance
Hull insurance covers any accidental damage to your drones during commercial operation. This policy may or may not protect any related equipment for flying the drones. It is essential to know exactly what drone components are covered (such as remotes) to determine if you need additional coverage for any equipment.
Payload Insurance
You probably want to consider payload coverage if your drones carry expensive equipment or cameras. Often, this equipment can be more costly than the drones and would not be covered by hull insurance. Make sure you are specific when describing your equipment to your broker when it comes to getting payload insurance to ensure you get enough coverage.
Additional Coverages Drone Companies Should Consider
You might also want to carry a few other types of insurance for your drone business. These coverages may be added to your standard business insurance policies and may require a different carrier than your drone hull and liability insurance provider. A drone insurance broker can help you get the correct coverage.
Cyber Liability Insurance: This policy will cover any costs connected to cyber attacks if your drones are hacked or compromised.
Non-Owned Aircraft Liability: If your company works with contractors who own and operate their own drones, you may need non-owned aircraft liability.
Commercial Crime Insurance: This coverage is for the theft of your drones. Coverage for employee theft is usually separate from coverage for theft by a third party.
Take Necessary Steps to Ensure Claims
Like any insurance, it is possible to be denied drone coverage, or a claim could be denied. That is why it is crucial to understand your insurance coverage fully.
Reasons a claim could be denied should be clearly stated in your policy, and knowing them can help you take any necessary steps to ensure coverage. For instance, some insurers may require you to keep flight log data for your drones.
Knowing what your insurance does and does not cover and any exclusions can help make you stay covered and get compensated in case of a claim.
How Much Coverage Should You Have for Your Drone Business?
Trying to determine what your business insurance covers and what your drone insurance covers can be tricky.
A trusted broker can help you understand your drone business insurance needs, including the types of coverage you should have and how much. Many factors go into determining coverage, including the type of drone, how it is used, where it is used and your experience operating it. Here at BWI Aviation we can make sure you correctly insure drone business and get the best price on coverage.
BWI Aviation Insurance provides drone businesses with the best drone policies suited for their needs so they can operate their business with peace of mind. Contact our team now and get a quote.
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