Insurance in the age of drones - The re/insurers
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Until there is specific coverage lines for drones available, the best advice has to be 'talk to your insurance agent'. The damage a drone can cause could be significant. No one, hobbyist, or particularly commercial operator, should fly a drone without feeling very sure of their insurance cover.
Drones are considered an aviation risk for insurance purposes when they are covered by the national aviation authority. Although there are very different national regulations, this tends to mean that any form of commercial drone use falls under aviation risk. It is expected that recent changes in US legislation will significantly increase the use of commercial drones. In other countries, increased drone use may see regulators struggle to keep up. Whether drones remain under aviation risk remains to be seen. It may be that they develop into their own line, the way space has done. It could be that they become so ubiquitous that they fall under casualty liability, as ground based robots would be.
Casualty and liability lines do not cover aircraft unless a specific exception has been made. That exception would likely be ring fenced with limits and exclusions. This is not the case if someone else is operating the drone on your behalf, however the liability policy would not cover damage to hull or cargo.
The good news from insurance is that there has been very little claims experience as yet relating to drones. Singer Julio Iglesias suffered a minor bodily injury on stage due to the propellers of a drone. In Germany, a claim was made for a broken windscreen when a car was hit by a drone, but no further damage was done. The potential for injuries as a result of drones remains considerable, particularly if a drone were to set off a chain of claim events, for example, crashing into one car and causing a multiple pile up. The greatest concern remains a collision between a drone and an aircraft, particularly a major commercial plane. There have been near misses reported, but no case yet.
Summary of the three Swiss Re presentations of Georgios Toulkeridis (Head Aviation Reinsurance), Michael Meadows (Senior Product Manager, Casualty Underwriting) and Thomas Fausten (Senior Claims Expert) at the Centre's Drone event in October 2016. Summary written by Simon Woodward.