Drone Insurance Guide

How does drone insurance work?

Drone insurance covers the commercial use of unmanned aerial vehicles (UAVs) or, as they are now referred to in Australia, remotely piloted aircraft (RPA). If your drone is lost, damaged or causes loss, damage or injury to others, drone insurance covers your liability costs to a certain extent, depending on the policy.

What about recreational use?

In Australia most drone insurance policies are designed for commercial purposes only. However there are a few insurers that offer cover for recreational use. Note: if you operate a drone recreationally, you're still subject to most of the regulations applying to commercial drone operation.

What types of cover are available in Australia?

In Australia, drone insurance covers two main areas:

• Public liability. This provides cover up to $20 million against third-party damage and bodily injury claims arising from the operation of your drone.
• Vehicle & equipment. This is an agreed value for loss or damage of your drone and operating equipment (often including payload).

In America, where commercial drone insurance is more widespread, cover can include a bigger range of options such as liability, hull (the drone), payload, ground equipment, non-owned coverage (borrowed or leased drones) and personal injury cover (copyright and privacy infringements).

What types of accidents or liabilities are covered by each policy?

Examples of potential accidents involving drones where drone insurance would be beneficial to have include:

• Loss or damage of the drone due to loss of control resulting in a crash
• Damage or injury caused during the crash to third party property or persons
• Damage or injuries caused to operating equipment, ground crew or onlookers

What affects the cost?

As with any form of insurance, certain risk factors determine how much an individual will pay for drone insurance. When preparing your application for underwriting, your broker will consider some or all of the following factors to determine how much your drone insurance is likely to cost:

• The number of flying hours you have logged (in aviation, flying hours equates to experience and operational competency)
• The cost of your drone and equipment (needed for agreed value cover)
• The size and weight of the drone you are operating (weight classifications in Australia include micro (250 grams or less), very small (more than 250 grams, up to 2 kilograms), small (more than 2 kilograms, up to 25 kilograms), medium (more than 25 kilograms, up to 150 kilograms) and large (over 150 kilograms))
• Whether you are able to automatically record your flight log and data (required evidence when claiming)
• Whether you keep a maintenance log and regularly maintain your drone and equipment
• Whether your drone is owned or leased
• Where you are operating your drone (ie over water, near built-up areas, around hazards such as power lines etc)
• Whether you have any previous history of drone accidents or loss

Who offers drone insurance?

The following brokers and insurers offer public liability, UAV and equipment cover:

Insurance exclusions to be aware of

To retain your drone insurance cover, you must always operate your drone in a manner approved of by your insurer. Exclusions from cover may include:

• Not logging flights and not being able to prove with flight log data what happened during an incident
• Operating your drone recklessly or in contravention of air safety regulations
• Not registering your drone when registration is required
• Not logging battery cycles and maintenance changes

What regulations will you need to follow in Australia if you fly a drone?

Whether you operate your drone commercially or for recreational purposes (unless it is a very small drone being operated over private property), you must always observe the Civil Aviation Safety Authority (CASA) Regulations which require that you:

• Know Your Drone: A website that outlines the rules in easy-to-read infographic-style format, along with informational videos and tips & tricks.
• AirMap for Drones: An app for Android and iOS that uses air-traffic-control data from Airservices Australia. It uses a convenient interactive map that shows users where they can and can't fly their drones.

FAQs

• Is drone insurance legally required for commercial pilots in Australia?

  Not as a general rule. CASA's drone rules (Part 101 of the Civil Aviation Safety Regulations) don't include a general requirement to hold drone insurance, whether you fly recreationally or commercially. Even so, most clients and councils will still demand proof of public liability cover before allowing you to operate on their sites.

• Will my Australian home and contents insurance cover my recreational drone?

  No, standard home insurance policies in Australia typically exclude drones from coverage because they are classified as aircraft. You generally need to purchase a specialised hobbyist drone policy or an add-on to ensure you are covered for accidental damage or third-party liability.

• Does drone insurance cover privacy infringement and data breaches?

  Yes, but it is often an optional add-on. Many comprehensive commercial policies offer Privacy and Cyber Liability extensions to cover claims arising from the capture or misuse of personal data collected during drone flights.

• How much does a commercial drone insurance policy cost in Australia?

  Approximately $500 to $2,000 per year is the typical cost for a commercial drone insurance policy with a standard $10 million or $20 million public liability limit. The exact premium will depend on your claims history, the value of your equipment and whether you hold a Remote Pilot Licence (RePL).

• Can I get drone insurance for the 'excluded category' (under 2kg)?

  Yes, you can obtain liability-only insurance for drones in the excluded category. Under CASA's rules, you don't need a Remote Pilot Licence (RePL) to fly a micro or excluded-category drone, but you do need an RPA operator accreditation (or an RePL), and a drone you fly for business or work must be registered with CASA, with registration renewed every 12 months. Many specialist Australian insurers now cater specifically to the 'sub-2kg' commercial market.

• Does drone insurance cover a total loss if the drone flies away?

  Yes, most 'hull' insurance policies in Australia cover total loss resulting from a technical flyaway event, provided the operator was complying with CASA safety rules at the time. You will generally be required to provide flight logs to prove the loss was due to a malfunction rather than pilot negligence.

Written by

Alex Reid

Expert

Add to Preferred Sources

Alex Reid is Finder’s business insurance cadet. He has a Master of Marketing from the University of Technology Sydney, with a background in business and sales. When not writing about business insurance for Finder he's a keen scuba diver, recently completed his 200th hour underwater and his PADI Divemaster certification. Before working at Finder he lived in Hangzhou China, where he studied Mandarin and Chinese culture. See full bio