How to Insure Drones (Recreational and Commercial Use)

As drones are becoming cheaper, smaller, easier to operate, and much more versatile - it’s no wonder why many businesses and budding drone pilots are taking a liking to the hobby. 

Drones, otherwise known as unmanned aerial systems (UAS) or unmanned aerial vehicles (UAV), encompass any remotely controlled aircraft that are operated by “pilots” through software or apps. Just in the past decade drones have boomed in popularity not only amongst numerous types of businesses, but also hobbyists hoping to capture video footage or practice their flight skills. Usually these drones are usually small or compact in size, but can hold cameras, other useful equipment, or entire packages. 

As the uses of drones continue to grow, so too does the potential risk they present. Beyond collisions with passing birds (or other objects), drones can open up a whole range of liability risks and potential insurance claims for their pilots, businesses, and manufacturers. 

At Berry Insurance, we’ve seen the insurance risks drones can pose for both commercial and recreational drone pilots. In this article we’ll cover what risks drones present, the insurance policies available for drone operators, and which coverages are most important.  

Drone safety: what are the most common risks? 

Before we review what insurance coverages are offered for drones, let’s touch on some common hazards or claims a drone operator will run (or fly) into. 

Collisions: 

The most common risk you will encounter as a drone operator is the likelihood of the UAS crashing into someone or something else. Whether it be a building, trees, another person, or something else entirely - collisions are common and can easily cause damages not only to what it flew into, but also to the drone itself and any equipment it is carrying. 

Privacy concerns: 

As most UAS utilize video to assist in their remote flight operations, drones can present a substantial privacy concern. Drone operators open themselves up to potential claims and accusations if their drone was thought to be recording on private property. Drone operators or businesses would have to prove any privacy breach was accidental - as any intentional illicit activity with a drone will not receive coverage and be subject to legal action. 

Cybersecurity risk: 

As drone use increases, so will criminals wishing to interfere with drone operations. As drones are remotely accessed, cyber criminals have been known to hack into flight controls or data collected by the drone. Any data breach presents another privacy concern while the loss of control of your drone by criminals could cause other damages or have it be stolen altogether. 

Do I need drone insurance? 

As the community and business surrounding UAS is still growing, there are not currently any legally required insurance policies for drones or their operators by the federal aviation administration (FAA). 

However, just because there are no current legal requirements, this does not mean insuring your drone and equipment is a bad idea. 

Drone insurance for personal use: 

If you are a hobbyist flying drones in your backyard or at the local park, you may not have to worry about additional coverage in most scenarios. If you are already covered under a homeowners, renters, or condo insurance policy, then the drone will likely be protected under the personal property section of your policy if it is damaged by a covered peril. Some exclusions on personal property protection may apply to drones that are used to carry or deliver items, as this would be classified more as a business use of the drone. 

Depending on your insurance carrier and policy, you may be able to receive personal liability coverage for any claims associated with damages caused by your drone. So any legal, medical, privacy, or repair fees would receive coverage up to your policy’s limit minus your deductible. As flying a drone comes with many unpredictable factors and risks, having coverage can be handy for the times when you accidentally mistake your neighbor's new car for a landing pad. It is important for any recreational drone user to contact their insurance agent or carrier regarding their policy limitations and coverages, as some homeowners', renters, or condo policies will have restrictions on their liability coverage for aircraft. As the FAA considers drones to be aircraft, you may find yourself without coverage if your policy excludes them. Some insurance carriers will include drones in their liability coverage as long as it is a “model aircraft” that is not being used for business purposes.

If you find yourself without coverage due to restrictions on your homeowners, renters, or condo policy, separate drone insurance policies (which we will cover below) may still be the best option for you to cover any expensive damages or claims. 

Drone insurance for business use: 

If you are using your drone for business purposes or as part of a larger company, drone insurance policies will be an important step before you take to the skies. 

Most general liability insurance policies will exclude coverage for unmanned aircraft or drones, including them as part of the larger liability restriction on aircraft. As liability coverage protects your business in the event of legal, medical, or privacy claims and lawsuits, having a separate drone liability insurance is a must have for any commercial drone operator or company renting a drone for their own use. 

Most companies will require hired drone operators to show proof of liability insurance for the UAS before they are allowed to work. The minimum level of insurance requested by companies hiring drone operators for commercial use would depend on the company's own liability exposure and the requirements of their specific work site. 

However, commercial property insurance would extend coverage to drones and the equipment used to operate them. This policy offers asset protection for a number of risks your business will encounter, including everything from theft, fires, and storms. Drones would be covered as either business personal property or a scheduled piece of equipment. 

What types of insurance are available for drones? 

If the coverages offered by your personal or business insurance policies are not enough for your specific drone operating needs, you may want to purchase these more comprehensive drone coverages.

Drone liability insurance: 

You can think about this coverage in a similar way to liability insurance offered for cars - as this policy protects you from any third-party claims of property damage or injury related to your UAS. So if your drone accidentally collides with a building, someone else's car, or worse - someone else, this liability policy would offer coverage for any damages or medical expenses. 

Drone liability limits typically start at $500,000, but we would usually recommend clients go with a $1 million limit, as the cost of legal defense or medical coverage in the event of a claim could be very expensive. 

This liability policy would also offer protection in the event of invasion of privacy claims made against the operator or company. This can be crucial for drone operators that could accidentally capture sensitive footage or information while flying. 

Physical damage coverage: 

Also referred to as drone hull insurance, this coverage is important for any operator to consider, as it is what insures the actual drone. Physical damage coverage insures the UAS in the event of any damages made to the drone, such as if it collides with another object or has a particularly rough landing. 

Some physical damage coverage policies will also cover the systems related to the drone itself, such as the ground stations (the system controlling the drone) and payloads (what the drone is carrying/operating). This can be tailored to the needs of each operator or company, letting you add whatever needs to be protected onto the policy. 

This is mostly recommended for higher end drone models or those with expensive equipment attached or used to operate it, as putting physical damage coverage on a low-cost UAS is likely unnecessary. This is because the deductible you would have to pay in the event of the claim would cover or come close to the replacement cost of the drone itself. 

Other useful types of drone insurance:

• Payload insurance: Carrying expensive cameras or other equipment that easily exceeds the cost of the drone? Payload insurance protects the costly attachments to the craft you will want covered. This can also be extended to cover theft as well, even of your ground stations/control system (computers, tablets, cases, etc.)

• Cyber-liability insurance: This policy can help protect businesses in the event of a cyber attack causing a breach in their data. This can pay for any fines or fees associated with a cyber attack, which can be important in the event of a cyber-based attack against your drone, operating system, or collected data.

How much does drone insurance cost?  

The cost of your drone insurance coverage will vary depending on the value of the drone/equipment and the risk of loss. 

Drone insurance coverage can range from about $60 a year for personal use and up to hundreds or even thousands of dollars a year for larger commercial projects. 

Speak to your insurance agent or carrier today to learn more about your insurance options for your drone. Any operators with a more professional drone system may also wish to contact the drones manufacturer about any insurance policies they offer to insure their models. 

Sky-High Coverage 

While exploring the air with your drone can unearth fantastic views or collect important data, it’s crucial to guarantee you're properly protected when traversing the skies. 

If you are utilizing your drone for commercial means, it can be important to know how to handle the insurance claims process in the event of a claim. Learn all about how to file a business insurance claim and the process that follows by reading this article: What to Expect During a Business Insurance Claim.

If you are instead a hobbyist who wants to know more about how your homeowners cover your drone and equipment, check out our helpful guide about what is covered under homeowners insurance.