What Kind of Insurance Do Commercial Drone Operators Need?

Drone Photo Credit: Multivista Systems

Commercial UAV Expo 2018 Update:

We’ve talked about what it means for commercial drone operators to assess risk, but the nuances associated with different types of insurance and whether or not standard policies cover a given operation have many people exposing themselves to liability without fully realizing what they’re doing. It’s an issue that can cause serious issues financially and legally.

As the biggest insurer of commercial drones on the market, these are kinds of issues that Coverdrone helps commercial operators understand and work through everyday. As the first insurer to offer specialist coverage to commercial drone operators in the UK, the company has worked to ensure their customers are protecting their project and compliant with the regulation in a variety of regions across Europe, Canada, Australia and New Zealand. They offer bespoke protection, including full cover whilst in flight, aviation liability, data protection and invasion of privacy, plus many other additional features.

To get a better sense of what Coverdrone’s fully comprehensive aviation insurance product looks like, we connected with Andrew Heath, Director at Coverdrone. We discussed how the needs of the market have evolved, what approach they take to ensure their customers have the right policy in place, when a few of their new products will be available and plenty more.

  

Jeremiah Karpowicz: Tell us about Coverdrone. What makes you the biggest insurer of commercial drones on the market, and why is that significant? 

Andrew Heath: We were the first specialist insurer available to drone users and we are the largest drone insurance provider by policy count and number of operators insured, we also cater for the larger drone operator with bigger sums insured which aren’t widely available in the market. It has allowed us to build up a huge amount of expertise, we can handle claims faster and persuade insurers to give not only better rating but the extra pieces of cover that may not be available to a smaller facility. It has also enabled us to negotiate with external companies when trying to buy ‘additional benefits’ such as the ‘Coverdrone Flysafe’ app.

 

How has regulation in different areas of the world impact the approach you’re able to take in terms of the services you offer?

To date, we have focused on the commercial drone market in the UK, Europe, Canada, Australia and New Zealand. We have plans to expand our reach even further in the near future. The insurance regulatory framework in the EU has always been there, it has taken a while to educate the drone community regarding the minimum levels of insurance cover they need to carry legally, but I now feel that as a whole the community is doing a much better job with this.

With drone regulations in general, when we first started insuring drones, even the training centres didn’t exist and so there weren’t any qualifications or permissions for people to obtain. We have worked to adapt to the changes that were essential to the industry to allow it to evolve safely for everyone.

 

How have you seen the needs of the market evolve over the past few years when it comes to commercial drone insurance considerations?

When we first started approximately 10 years ago, there wasn’t any cover available in the insurance market for drone activities. Back then, we were able to offer liability insurance with some cover for equipment, but not whilst in flight. It’s been a steep learning curve for us and our Underwriters.

The policies we sell now are almost unrecognisable from the first ones we sold, it really is a complete package now. Initially clients wanted to use their equipment for photography purposes but this has developed and now many industries use the technology, our policies have adapted to cover more high risk activities such as off shore work etc.

 

What’s the biggest mistake that you see operators make around securing the right insurance for their commercial drone operations? 

The one we see daily is people trying to insure for one drone at a time as they feel that they will only fly one drone at any time. If they could see the types of claims we settle, I think they would insure all their equipment as a whole, drones are becoming highly theft attractive, the equipment can be bulky and very often some or all of the equipment can be left in vehicles whilst the operator is away working or in hotels, flight time is a risk obviously, but it isn’t the only time expensive equipment is vulnerable.

 

 

Tell us about some of your policy features. How do you help ensure operators are getting the right policy for them? 

Obviously, the policy gives core covers such as liabilities and equipment; but there are some really nice features that people may not appreciate fully until they come to make a claim. For instance, we cover replacement drone hire, it allows for operators to keep working and honouring those contracts whilst we replace their equipment. Our re-instatement of data cover pays for all the specialist IT services they may need to recover the images from the shoot; and the invasion of privacy cover isn’t necessarily on people’s minds when they first call, but the risk is definitely there for them.

 

What kind of feedback have you gotten about your app? Has that helped open up your service to that many more people? 

The ‘Coverdrone Flysafe’ app has been a huge success, we haven’t had any negative feedback from it at all, which speaks volumes I think. To be able to offer these safety checking features to our clients free of charge in conjunction with our partners Altitude Angel gives our customers a huge advantage. I would recommend anyone who isn’t already using the app to download it and give it a try. We have included all the premium functionality so clients can enjoy things like worldwide maps, detailed emailed risk analysis to help with pre-flight assessments and live airspace alerts.

 

What can you tell us about the new products you’re launching?

We have two major new announcements to launch. The first being our full cycle client management system, which is available on our website right now. It will allow customers to quote and purchase a drone insurance policy. In addition to that, they will be able to log back in and make any amendments to the policy they need, which is always useful for those last-minute changes you forgot about – no more waiting for the office to open! All documentation will be instant and emailed over to the client. The policy renewal can be handled through the system, so it really is a full cycle environment.

The second product we have launched sits alongside our ‘Coverdrone Flysafe’ app and allows customers, both commercial and recreational, to buy per-day insurance cover. They are able to choose from liability only or to add the equipment cover as well. It’s a very cost effective way of operating for those less frequent flyers.

  

What sort of person is in the best position to utilize this offering? Has it been created for a specific type of operator or organization? 

The ‘Coverdrone Flysafe’ app is currently available for commercial and recreational users in the U.K, Customers in the EU will be able to access the per-day option later this year. The coverage is fully compliant with EC785/2004. Over the years we have had lots of feedback from operators regarding the usage of their drones and it can vary dramatically from one to another, purchasing cover this way will appeal to many people that don’t operate a drone on a regular basis as part of their job. From a recreational point of view, it allows them to purchase ‘on the spot’ coverage at short notice, and almost uniquely at the moment, to insure the drone itself. All at affordable levels.

 

Can you talk about some of the challenging situations that you’ve seen operators run into when they don’t take insurance considerations seriously? 

The main point I would like to make here is to encourage all operators to consider the true replacement value of their equipment. We provide full new for old cover on our policy, but prices in the industry are changing all the time, sometimes even models become out of date and are replaced by newer more expensive versions.

 

What would you say to me if I told you that I was a commercial operator and I believe that my “regular” insurance has me covered for any issues that might arise in terms of how I’m using my drone in a commercial setting? 

Well, regulations can differ from country to country but in the EU all commercial drone operators must purchase cover that complies with regulation EC785/2004, so my initial advice would be to double check that your ‘regular’ policy complies. Also a lot of photography type polices can have exclusions for things like ‘high risk’ premises and activities, all these have been included as standard in our policies. Drone operators can be called upon to use their equipment for varying activities and they don’t want to sift through legal policy documentation each time.

 

If I’m someone who isn’t sure where to start when it comes to figuring out what kind of coverage I need, what’s the best place for me to begin? 

We have a lot of information on our website www.coverdrone.com or our advisors are always on hand to offer one-to-one advice.

 

 

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About the Author

Jeremiah Karpowicz always envisioned a career as a screenwriter, but found the autonomy and freedom he was looking for in the digital space. He has created articles, videos, newsletters, ebooks and plenty more for various communities as a contributor and editor. He has also worked as the Executive Editor for ProVideo Coalition where he was first introduced to UAV technology. You can get in touch with him on Twitter: @jeremiahkarp

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