What brokers need to know about the growing drone insurance market
What brokers need to know about the growing drone insurance market | Insurance Business Canada
Technology
What brokers need to know about the growing drone insurance market
Protect your clients from these common claims
Technology
By
Nicole Panteloucos
While drones are often associated with recreational uses – like capturing footage of your latest beach vacation – their commercial applications have significantly expanded in recent years.
Drones are now widely used in industries such as agriculture, real estate, media, entertainment, and construction. This surge in usage has led to an increased demand for insurance policies tailored to the unique risks drones present.
With advancements in drone technology and stricter regulatory requirements, understanding the intricacies of drone insurance is crucial for brokers.
As the global drone insurance market is projected to reach $2.6 billion by 2032, Diana Charters (pictured above), managing director at i3 Underwriting, shared insights into navigating this emerging sector.
What is drone insurance?
Drone insurance is designed to protect individuals and businesses that own and operate drones. It offers financial protection against potential third-party liabilities and accidents that may occur during drone operations.
According to Charters, brokers should be aware of two broad classifications of drone insurance: hull insurance and liability insurance.
“Hull insurance applies to the cost of the drone itself should it get damaged,” Charters explained.
This type of coverage can be especially important for agricultural clients, as drones increasingly assist farmers with labour-intensive daily tasks. Recently, Canada’s Outdoor Farm Show in Woodstock, showcased a remarkable range of high-tech drones, demonstrating their capabilities in spraying, spreading, mapping, and surveying.
With top-of-the-line drones carrying hefty price tags, it’s crucial to encourage clients to protect their investments.
Beyond insuring the drone itself, Charters also emphasized the importance of liability insurance. This coverage not only includes property damage and third-party liability, such as bodily injuries, but also addresses invasion of privacy concerns should a drone inadvertently capture unintended footage or information.
“This is crucial for drone operations as these claims can lead to expensive privacy lawsuits,” warned Charters.
“When signing up for drone insurance, applicants typically have the choice of liability insurance or a combination of liability and hull insurance. The type needed largely depends on how risky the planned operations are.”
Protecting your clients from common claims
Whether your client is in the entertainment industry, farming, real estate, aerial photography, surveying, or data collection, like most flying objects, drones come with a unique set of risks.
Below, Charters outlined common types of drone claims and shared tips brokers could use to help clients safeguard their tech:
Theft: “With many drone operators owning multiple drones and valuable equipment, theft is becoming more common. It’s crucial to advise clients to never leave their equipment unattended in public areas and to keep it locked away when not in use.”
Bird Strike: “Many people wrongly believe bird strikes are uncommon, but they are one of the most frequent types of drone claims, often causing significant damage. Operators need to be aware of this risk and its potential impact on their drones during flight.”
Mechanical Failure: “Operators should follow manufacturer guidelines and perform thorough safety checks before take-off. Regular software updates are also essential to minimize the risk of mechanical failure.”
Operator Error: “Factors like fatigue, poor communication, and distraction can lead to drone-related incidents. These risks can be easily prevented when operators are made aware of the hazards associated with flying.”
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
