Drone Insurance

Beyond the requirements to register with the FAA and any state specific ordinances, there are surprisingly no laws mandating Drone Insurance in the United States, but that doesn’t mean that it’s not important. If you have a drone, you should absolutely consider purchasing drone coverage. The truth of the matter is that the space above us can be tricky to navigate, even during clear weather. There are many concerns about what expectation of privacy exists. Flying cameras over your neighbor’s property and even over some public places can breach that right. This can lead to liability for “intrusion upon seclusion” which is a tort that the courts are taking very seriously. With settlement awards on the rise, you do not want a nuclear verdict being returned without some liability coverage in place.

In addition to privacy concerns, there is also a potential for injury or property damage allegations from an errant drone. There were approximately 4,250 drone injuries reported between 2015-2020. This is not based on weaponized drones, but simply on falls, collisions, and “user error”. Property damage costs quickly mount as drones run into structures, fencing, trees and plants, vehicles, and pets. These liabilities are typically excluded under your Homeowners or Commercial General Liability policy, for a multitude of reasons. As such, it’s important to consider Drone specific broad liability coverages for bodily injury, property, and personal injury in the case of privacy invasion.

Not only can a drone collision damage others property and bodies, but there’s a solid chance that there will be damage to the unit itself. As such, many carriers who provide drone coverage will also offer hull insurance. This coverage will assist in repairing the damages to the drone itself, or even replace it in the event of excessive damage to the unit. It is important to note that this coverage may not include any sensors, cameras, equipment, or additional payload as those are not truly considered as part of the drone. As such extra coverage may be needed to protect those accessories as well.

One other area of risk to consider is the cyber risk associated with operating a drone. This can include remote takeovers, malware, and access to your photos or videos. Recently, there was press regarding the takeover of a financial services company on the East Coast in which threat actors deployed two drones with modified penetration testing tools mounted in order to secure access to networks and credentials. These drones were discovered on the roof, and it appears that the threat actors spent as much as $15,000 to carry out this single cyber-attack. Ironically, the threat actors then crashed the drones while trying to escape the scene. Makes one wonder if they had sufficient hull and accessories coverage…