A guide to UK drone insurance

In the United Kingdom, there are a small number of specialist insurance providers, including Hiscox, who offer bespoke covers in partnership with Moonrock Drone Insurance, tailored to a variety of user needs.

Policies for drone operators should encompass coverage for a range of risks, from accidental damage to third-party liability. Bespoke, subject matter specific policy wordings should be compliant with Regulation (EC) 785/2004 as required by the Civil Aviation Authority (CAA) in respect of commercial operations. It is important that the policy provides sufficient material damage coverage for payloads, such as LiDAR scanners and videography equipment, these can often be of significant value and outweigh the sum insured of the drone itself. The majority of drone policies are transacted under delegated authority schemes, facilitated through online e-trade platforms. Key policy requirements typically focus on the operator flying within CAA regulations, individuals holding sufficient qualifications, adhering to manufacturer guidelines as well as avoiding flights in hazardous locations such as airports.

With regard to CAA qualification requirements, these fundamentally focus on the type of operation being conducted, the level of risk and the level of performance. There are three categories in which a pilot could operate in: open, specific and certified. The open category is utilised for low risk operations, typically conducted by hobbyists. The specific category represents an increased level of risk and the operator will need to obtain operational authorisation from the CAA, through utilisation of an operational safety case risk assessment. The vast majority of commercial operators will operate in this category. The highest risk category is certified, which is akin to manned aviation and subject to the same regulatory regime, very few UAV operations will fall into this area. The primary qualification and training courses are the A2 certificate of competency and GVC certificate. The level of qualification requirement will depend on criteria outlined by the CAA which is subject to constant evolution.

In terms of risk management, the majority of drones on the market and specifically those manufactured by industry leaders such as DJI contain automatic safety features which include GPS geo-fencing, preventing flights in restricted areas, collision avoidance systems, parachutes and return to home features in the event of lost connectivity. A high proportion of collision incidents are as a result of pilot or technological errors.  As technology progresses in respect of safety and redundancy features, this should theoretically reduce the frequency and severity of incidents having a favourable impact on the market cycle of drone insurance.  

The advantages of embracing drone technology are vast, whether capturing stunning aerial footage, inspecting infrastructure, crop spraying or aiding in search and rescue missions. The safety, environmental and efficiency savings across numerous industries are substantial but the importance of working with a specialist broker and insurer to obtain bespoke, compliant and comprehensive insurance policy cannot be understated.

Continued exponential commercial growth in the drone industry can be expected across the globe primarily in Asia, with the Middle East and Africa also making vast developments in the global drone insurance industry.

UAV usage is forecast to increase in a number of sectors, most notably the energy, construction and agricultural markets, where drones are being utilised for survey, inspection and crop spraying. There will also likely be substantial growth in Beyond Visual Line of Sight (BVLOS) operations, which will be key for drone delivery services allowing food, medicines and vital supplies to be distributed to remote areas. Further enhancements are also forecast in respect of commercial delivery programmes facilitated by organisations such as Amazon, providing significant supply chain and environmental advantages. As aerial traffic increases in the future, there will be increased focus on regulation and insurance provision to ensure safety is always at the forefront.