Incidents involving drones can be minor, slightly humorous, or have extremely dire consequences. From a kiss-cam drone cutting off a piece of a person’s nose or a drone spying through the president’s bedroom window, to extreme cases such as an engineering drone flying into a crane operator who knocks down a portion of an under-construction building, or a drone dropping weapons or bombs into a prison or flying into the propeller of a 500-passenger airliner. In addition, automated drones which have entered the market bring in a new type of risk. Automated drones are currently typically used to follow and record action sports, such as windsurfing or mountain biking, without the control of the sportsperson.
The new drone regulations, which came into effect on 1 July 2015 and form part of the Civil Aviation Regulations, place an obligation on those with commercial drone licences to obtain third party liability insurance. The risks associated with drones are significant and can lead to far-reaching monetary claims beyond the anticipation of both pilot and insurers. Accordingly, pilots need to insure, and insurers need to underwrite and provide adequate exclusions to limit their exposure.
Does the insurance policy provided aim to merely cover the pilot for physical damage caused to third parties and their property, or does the policy also aim to cover any consequential damages? Depending on the wording of the policy, protection can be much wider than intended (in relation to the insurer) or much narrower than intended (in relation to the pilot).
There are numerous types of risks that will need to be taken into consideration when underwriting or taking out insurance for a drone.