Drone Insurance


The holiday season is upon us, and everyone is preparing their wish lists. There’s a good chance that on someone’s list is tech item. One of the hottest tech gifts is Unmanned Aircraft Systems (UAS), more commonly known as drones. There are currently over 850,000 drones registered in the United States. Those numbers are expected to continue rising over the coming years. So now that this new hobby is landing under our trees, what should you know as a drone owner?

Drone Regulation

Since drones are traversing the airspace above us, regulation of these crafts belongs to the Federal Aviation Administration (FAA). It is important to know that if your drone exceeds 8.8 oz, the FAA requires registration of the aircraft. Registration should be completed on the FAA’s website, which also contains a wealth of information on safe operations and laws regarding flight. Registration fees are minor – $5 for 3 years but failing to register pack a punch. The FAA can assess civil fines up to $10,000 or criminal fines up to $250,000 and up to 3 years in prison for failure to register or renew an aircraft. It is important to note that in addition to registering with the FAA, many states and cities have additional laws regarding registration, certification, and operation of drones so be sure to follow those as well.

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…

Safeguarding Your Success

Drones can be a lot of fun and are useful tools in many industries. They can capture amazing photos and videos that we couldn’t get otherwise and can be used in a multitude of capacities for individuals, businesses, and the government. If you’re the lucky recipient of one of these crafts this holiday season, make sure you’re following applicable laws, regulations, and guidelines. Once you’re ready for takeoff, make sure one of your priorities is reaching out to our high-flying team of experts to discuss Drone Coverage; we’ll fly into action to protect you and your craft from all the turbulence and help pave the way for clear skies. Contact Sentinel today to learn how we are dedicated to Safeguarding Your Success this holiday season.

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About The Author

Sherri Walker manages the efforts and deliverables of carrier claims adjusters in addition to completing a wide range of insurance claims analyses as Sentinel’s Director of Claims.

Sherri, who has a wealth of multi-line adjuster experience, brings a strong background in customer satisfaction with the ability to diffuse difficult, and sometimes extremely emotional, situations very smoothly.

The Cripple Creek, VA native began her career with Nationwide Insurance in 2005 where she advanced to a Senior Adjuster role. Prior to joining Sentinel, Sherri spent seven years as a Field Claims Superintendent, handling all aspects of claims for Cincinnati Insurance Companies.