Unmanned Aircraft Flying Above

Unmanned aircraft may sound like they belong in a scene from some science fiction movie set, but they are already out there enabling jobs to be done more safely and at lower cost, ranging from agricultural monitoring to wildfire surveillance and infrastructure maintenance.

In the UK, a House of Lords committee has recommended that a register of these unmanned aircraft, widely known as “drones” be created, which will initially target commercial operations. Other recommendations include whether or not to allow the use of geofencing (flight based upon GPS coordinates), clearer guidance for law enforcement and guidance on what levels of insurance users should purchase.

Insurers are also looking at the use of drones for their own purposes. In the US, insurers State Farm and AIG have received clearance from the Federal Aviation Administration to use drones for underwriting and claims application purposes.

The use of flying robotics is predicted to significantly increase over the next 10 years. By 2020 the use of drones could become common practice for almost 40% of businesses, according to corporate risk managers surveyed earlier this year by Munich Re.*

A multitude of liability issues will need to be addressed as a result. The risk managers surveyed by Munich Re-highlighted various concerns, including invasion of privacy (69%), inadequate insurance (12%), personal injury (11%) and property damage (8%).

To address the needs of this expanding industry, several insurers have developed coverage solutions specifically designed for the exposure faced by remotely piloted, semi-autonomous, and fully autonomous aircraft.

Coverage can include either ongoing usage or can be tailored to individual coverage for specific events. Typical coverage often includes similar elements as can be seen in a traditional aviation policy, such as:

  • Contractual liability
  • Personal and bodily injury to operators and third parties
  • Property damage
  • Third party property damage

Additional, more bespoke cover, can include:

  • Cover for operating at high-risk locations such as over water and indoors
  • Loss or damage to the drone and associated equipment
  • Cover for war and allied perils risks
  • Cover for operators still in training

Before considering using drones for your business it is also important to remember the guidelines for businesses from the Commercial Aviation Authority. You must request official permission from the authority if you plan to:

  • Fly the drone on a commercial basis
  • Fly a camera fitted drone within congested areas or close to people or properties that are not under your control

As drones become more popular, even if you are not planning on using them in your business it is also important to reassess any business interruption insurance cover that your business may hold. Flights into Manchester Airport were recently suspended when a drone was spotted in the area. As drone technology is still relatively new, it is important to check your cover is up to date and that you will be covered should a rogue drone cause trouble for your business.


“Drone use could soon become common practice for 40% of businesses, according to corporate risk managers surveyed by Munich Re” press release 13th May 2015*