Cover your assets

Why would I need insurance?

Flying drones can be a fantastic hobby or a great full-on business, but either approach needs particular protection.

In addition to covering the aircraft itself—known as hull coverage—there are liability, privacy, and other legal responsibilities to consider. What happens if you damage a client’s property or injure someone while flying a mission? Who is responsible and for what? Don't assume your homeowners policy, or even an umbrella policy that you might already have, covers you in the event of an expensive mishap with a drone. You could be in for (another) unpleasant surprise.

Commercial operators are often asked by prospective clients to provide proof of FAA certification, and, you guessed it, proof of insurance. Are you prepared to supply the requested credentials, and if so, do you have adequate coverage to meet their requirements?

What to cover

Insurance policies protect you in different ways, and you can buy two basic types of coverage.

Hull coverage applies to the aircraft, and possibly also the payload. (The payload can be worth many times the price of the drone if you're flying a true cinema camera around.) Some manufacturers such as DJI offer extended warranty plans (DJI Care/DJI Care Refresh) that include free repair or replacement of a damaged aircraft. This type of coverage is generally available at the time of purchase and applies in cases of accident, water damage, drop damage, or operator error. The price is usually a percentage of the cost to replace the covered equipment, and is well worth the money in some situations, such as an inexperienced operator flying expensive systems.

Hull coverage provisions can also be purchased with a drone-specific insurance policy, and those policies vary from one provider to the next, so be sure to read the fine print and ask your agent for clarification on anything you are unsure of. For example, some plans exclude components such as the gimbal and camera, the remote controller, or other ground equipment. The gimbal and camera are usually pretty fragile components and quite expensive to repair or replace, so it is a good idea to be sure that you do have coverage for these. Some insurers will offer protection for these items under what is called "payload" coverage.

Liability coverage is similar to what you might be familiar with regarding your car insurance. Liability coverage protects you from property damage claims or injury claims that may arise, money that you could wind up owing other people.

You can imagine a scenario where a loss of control of your drone could injure a person, or damage property, and the claim that could potentially result. Interestingly, privacy concerns are being addressed by some insurers as well, and some policies offer protection from claims of this nature as well.

There are also more specific types of coverage depending on the nature of your business needs such as additional insurance for ground equipment and payload. Be sure to address your specific needs with your insurance provider to ensure you are fully covered or if these items need to be added separately.

How to get insured

As we watch the drone industry continue to grow, we are also seeing many more resources for obtaining quality coverage. For example, many drone operators report that they have secured hull coverage at a very reasonable price through State Farm in some areas, but others have found it unavailable where they live. Some other insurance companies may be able to bundle coverage for your drone activities with your existing homeowner’s or renter’s policy.

There are also popular on-demand options such as Verifly and Skywatch that allow you to purchase coverage by the hour. These are very easy to use via an app on your smartphone or tablet. With just a few clicks, you are ready to fly with the coverage you just selected. They also offer longer terms such as monthly plans from Skywatch, or up to eight hours from Verifly. While these policies typically cover liability only, Skywatch does offer a hull coverage upgrade, and they also state that privacy claims are covered. Liability limits usually start at $500,000; however, most commercial clients will want to see $1 million or more, and some will require they be named on your policy.

More traditional term policies with broad coverage can be found with AOPA drone insurance partner AssuredPartners Aerospace as well as many others found through the Academy of Model Aeronautics and other aviation insurance sources.

The policy cost is usually a concern as well. You can expect a ballpark of around $600 per year and up for a $500,000 liability policy, and those rates are a bit higher for higher liability limits. Expect to add some for hull and payload coverage, which is often quoted at an annual rate of 10 percent of the equipment's replacement cost. On-demand plans are quite reasonable starting at around $10 per hour, which can be very favorable for the occasional need.

Remember to shop around, just as you do when buying homeowners or auto coverage. The rates and coverage limits will vary quite a bit between companies.

Summary

Insurance can be the last thing we think about while getting up to speed with all the other elements involved in learning to fly, getting a Part 107 certificate, and building a business. But it is one of the most important things, if not the most important thing, you can have to protect yourself financially from unforeseen accidents. I hope it will be something that you will never need to use, but you will be glad you have it if you ever need it. Even the best, most experienced professionals are wise enough to know that things can, and do, go wrong sometimes. Having a financial safety net to protect you, your aircraft, and possibly your business and livelihood goes a long way to helping you rest easy while in the air. Fly safe and have fun!