• TheDroneBlog
• Posted By

Drone Insurance Made Easy (For Pilots and Clients)

Trying to understand drone insurance can feel like trying to navigate through a dense fog.

There are multiple options available, and the details are often written in complex legal jargon not covered on your Part 107 exam.

Fret not; there is hope. With a little guidance, we can clear the fog and help you understand what you need to know about drone insurance.

What is drone insurance?

Accidents happen. Every drone flight has an inherent risk that something could go wrong.

Factors include pilot error, weather, bird strikes, mechanical malfunctions, loss of line of sight, electromagnetic interference, and any number of unexpected issues. 

Even with the most diligent preparations, accidents can still occur.  If an incident causes damage to property or injury to a person, you could be liable.

Drone insurance is protection against financial loss in the event of a drone accident. 

According to the Federal Aviation Administration, there are over 1.5 million recreational and 622 thousand commercial drones registered in the United States.

By 2026, registrations are expected to increase to over 1.8 million and 968 thousand, respectively. 

An accident is required to be reported if it results in a serious injury to any person or loss of consciousness, or damage to property (excluding the drone) in excess of $500.

Accidents can be reported via DroneZone or by contacting the nearest FAA Flight Standards Distribution Office.

Additionally, close calls, hazard violations, and safety-related incidents can be voluntarily reported via the NASA Aviation Safety Reporting System^[1].

Is drone insurance required?

Despite the many rules and regulations, the FAA does not require operators to have drone insurance.

However, some clients may require the drone pilot or overarching company to carry drone insurance for a job.  

Despite the many rules and regulations, the FAA does not require operators to have drone insurance.  There is currently no Federal Law that mandates drone insurance.

However, it is important to check the local ordinances where you will be flying. 

Many state and local Governments have implemented rules and regulations specific to their areas.

For example, Jackson County, Missouri, has a local ordinance^[2] that requires valid liability insurance and a permit to fly in the county parks.  

It is also a common practice for clients to require the drone pilot or overarching company to carry drone insurance and provide a Certificate of Insurance before starting work.  

Regardless of whether you are a pilot or a client, it is your responsibility to do the appropriate research and analysis to determine any insurance requirements.

Web searches, blogs, drone insurance websites, and drone forums are great places to begin your search. 

You will want to review the state, county, and city ordinances for local UAS rules.  This will also help you to know if an area is a local no-fly zone, has special rules, or requires a permit. 

Always take the time to read the actual referenced law or ordinance for yourself.  Sometimes the summaries misinterpret the information or leave out key details that you may be held accountable for.

Who should consider Drone Insurance?

Both pilots and clients need to have an understanding of drone insurance.

The pilot in command is responsible for the safe operation of the drone. In the event of an accident, the pilot may be held liable for the damage or injury caused. 

Depending on the circumstances, clients can be held liable too. It is important to discuss these factors before initiating a contract. 

Questions pilots should ask clients

As a pilot, you should inform any clients about the type of drone insurance you carry and the amount of coverage.

A few recommended questions to ask your client are as follows:

• Do you have an overarching drone insurance policy that would provide coverage for the scope of the contract? (This question is relevant in the case of a pilot performing a subcontracted service for a drone company.  The overarching company will most likely have liability coverage that will extend to the pilot for the specific job and probably will not include the pilot’s equipment.)

• Do you have specific coverage requirements?

• Have you identified any specific safety risks I should consider in my risk assessment?

• Do you have a requirement to be included as an “Additional Insured?”

• Are there any local ordinances that you are aware of that could restrict flight operations, require a permit, or mandate specific insurance coverages?

Questions clients should ask pilots

As a client, it is wise to inquire about drone pilots’ or companies’ insurance coverage.  Several recommended questions for clients to ask are as follows:

• Do you have drone insurance?

• What types and amounts of coverage do you carry?

• Can you provide a certificate of insurance?

• Who is covered by the policy? (This is important if you are working with a company that employs or subcontracts other drone pilots.  You need to ensure that the right parties are insured for the job.)

• Can you, as the client, be added as an “Additional Insured?”

• Does the policy include a “Waiver of Subrogation?”

• What is the insurance Policy Term? (You will want to ensure the policy term covers the dates and times of the job.) 

Drone Insurance Options

As the drone industry has evolved, so have the insurance options available.  These options are customizable such that you can select the coverage that works best for you. 

The three main options available are liability, hull, and payload insurance.  Drone insurance is unique in that policies can be purchased in a variety of terms. 

Standard policy terms are by the hour, day, month, or year. It is important to note that “by the hour” policies do not offer as many options as longer terms and may not include hull or payload insurance.  

Policy Term Options

Pay-by-the-hour drone insurance is a good fit for pilots that do not fly often and are looking for a low upfront cost. 

These policies are not offered by every insurance provider and can be purchased from on-demand insurance companies like Skywatch, DroneInsurance.com, AirModo, and Thimble.  

Hourly policies cover property damage, bodily injury, and privacy claims.  They are specific to a 2-mile radius surrounding the geographic area of your flight and provide coverage up to $25 million. 

Note, the price is location-based and may be different depending on the geographic area. 

Indoor coverage can be added for an additional fee, and flying at night may cost more.

The insurance term can be set to start immediately or up to 60 days in the future.  A Certificate of Insurance is available immediately upon purchase.

Monthly policies provide continued coverage for 30 days from the start date of the policy. 

With the longer term comes the following additional options: hull insurance, personal injury coverage, and medical expenses.

Depending on how often you fly and the flight risks, this may be a more cost-effective solution.  

Annual policies provide coverage for 365 days from the start date of the policy. 

Annual insurance has the same coverage options as monthly and is priced at the lowest rate for long-term costs.  The coverage can begin immediately if purchased from an on-demand insurance provider.

Annual drone insurance policies can also be purchased from traditional insurance brokers.  

Traditional brokers are an excellent resource for unique requirements such as beyond line-of-sight operations, cyber liability, workers comp, non-owned coverage, international coverage, test/development coverage, and liability limits greater than $25 million. 

Some brokers have even started offering on-demand policies as well.

Some prominent traditional Drone insurance brokers are as follows:

• Aerial Pak
• Avion Insurance
• BWI Fly
• Global Aerospace
• RNVA
• United States Aircraft Insurance Group

Liability Insurance

To be liable means to be legally responsible.  In simple terms, it means that you can be sued.  Liability insurance helps protect you financially should this occur.

If your drone cracks a window or crashes into a rooftop, the costs may be manageable.  If your drone hits a person after falling from 400 ft and causes hospitalization, the costs could be astronomical. 

Like seatbelts, liability insurance covers you just in case something bad happens.

Typical policies range from $0.5M to $5M. Custom and higher dollar amounts are available. The amount you need is a factor of risk.

If you are flying in a densely populated area with lots of expensive property, you may want more coverage than if you are flying over an open field by yourself.

Hull Insurance

In aviation terms, the hull is the main body of an aircraft. Hull insurance is for your drone. 

Having liability insurance alone will not cover repair/replacement costs of your drone in the event of an accident.

For a low-priced hobby drone, this may not be necessary.  But if you are using a high-end professional drone, the replacement cost could be thousands.  

Drone manufacturers are aware of this, and some offer their own in-house insurance policies. When evaluating policy options, it is important to read the “fine print” and understand exactly what is covered. 

The insurance company will look at the make and model of your drone in its pricing analysis.

Payload Insurance

A payload is considered anything carried by your drone that is not necessary for its operation. 

This is primarily for additional equipment attached to or carried by your drone, such as cinematography cameras, lights, drop mechanisms, and LiDAR systems.

This equipment could be more expensive than the drone itself and may not be covered by hull insurance.   

Additional Options

A myriad of additional options and add-ons are available for drone insurance.  This includes, but is not limited to, personal injury, medical expense, cyber liability, and foreign operations coverage.

It is important to take the time to consider your unique needs and risks as you look for a policy.

Personal Injury

Personal Injury coverage is not related to bodily injury.   It is for injury caused by slander, false arrest, and unintentional violations of privacy, the latter probably being the largest risk for a drone pilot.  

Medical Expense

Medical expense coverage is an add-on for medical expenses related to injuries caused by your drone.   They can be paid on a no-fault basis but do not replace your liability insurance.  

Cyber Liability

Cyber Liability coverage is a relatively new add-on.  It primarily covers you in the event of a cyber attack that results in a crash.

For example, if someone hacks your drone or ground station during flight and causes an accident. 

Additionally, some policies cover the expenses and fines you could be subject to in the event of a data breach.

Foreign Operations

Insurance policies are written specifically for a specific coverage territory.  A policy written in the United States of America would not provide coverage in another country. 

For trips abroad, it is important to ask your insurance broker about Foreign Operations coverage.

Key Legal Terms

Insurance policies are written in legal terms.  Do not get discouraged if you do not understand them at first.

Here are a few key terms to help you navigate the options available and ensure you have the coverage you want.

Named Insured

The named insured is the policyholder.  Typically this is the drone pilot or a company the pilot works for.

Additional Insured

This is an individual or entity added to the policy that will be covered.  Examples include clients, a contracted pilot operating for the named insured, land owners, and production companies. 

The additional insured is included on the certificate of insurance and can be added at no extra cost.

It is a common practice for clients to request to be an additional insured on the policy.  This provides them with liability protection in the event of an accident.

Premium

A premium is what is paid to the insurance company on a recurring basis for the policy.

Deductible

This is the amount of money the policyholder is responsible to pay out of pocket before the insurance provider will pay for expenses.  This is generally 5-10% of the hull value.  

Certificate of Insurance

The certificate of insurance is a document that provides proof of insurance.  It includes the named insured, policy period, policy number, issuing company, coverage territory, and any additional insured. 

Clients will often request this document to ensure the pilot or company has coverage. 

Waiver of Subrogation

Subrogation is the practice of substituting one party in place of another to make demands with respect to a debt.

For example, if the insurance company pays the insured for a claim, it can seek reimbursement from an at-fault party. 

On drone policy, a waiver of subrogation waives the right for the insurance company to seek reimbursement for losses paid to the additional insured (typically the client).

Clients can request this be included with the certificate of insurance.

Declaration Page

The declaration page is a key page in the policy that lists all the critical coverage information.  It’s the easiest page to look at to get an understanding of what coverage is included.

The amount of coverage, liability limits, and territory can be found on this page.  

Financial Protection

Like putting on your seatbelt in the car, drone insurance is an important financial protection in the event of an accident.  It could protect you from financial ruin.

There are many options and add-ons available.  Understanding the key terms will help you clear the fog and select the best policy for your situation.

References:
1. UAS Safety Reporting | NASA (link)
2. County Code – Jackson County MO (link)

• TheDroneBlog
• Posted By

DJI Mini 3 / Mini 3 Pro – Insurance

In today’s topsy-turvy world, we’re all familiar with insurance. We insure our cars, our trucks, our motorcycles, our boats, our homes, ourselves.

Heck, at this point, it might even just be easier to list what we don’t insure. So, yeah, we’re all pretty familiar with insurance and how it works.

The question then is, should you insure your Mini 3 or Mini 3 Pro? If so, what type of insurance should you carry?

Then of course the most important question of all. What’s it going to cost you?

The insurance industry as a whole was late to the party when it comes to insuring one’s UAV.

I remember the first time I brought it up with my agent. He couldn’t even tell me if there was a policy that would cover my request. He had never heard of it and would have to look into it.

At that time, what we found was an aviation insurance company that would extend coverage, although they were only used to dealing with manned aircraft.

That policy was a first of its kind for them, and it was pricey. Luckily for you, this is now and not then.

Nowadays we have many companies that we can go to for insurance for our unmanned aircraft and accessories.

More importantly, the cost of such plans has come down quite a bit and is more affordable than ever.

Of course, just as we see with car insurance, not all insurers are the same, with some being better than others. We even see some of the big insurers now getting on board with plans.

Companies such as State Farm or Allstate now offer coverage for Unmanned Aerial Systems, a market they largely ignored for some time, mind you.

You will find that drone insurance has become quite versatile, with some companies offering hourly coverage over an all-the-time policy.

For those infrequent flyers, this can be a nice, cost-effective means of having coverage only when you need it.

Now, as a commercial operator, I have and maintain a policy year-round, for my needs. That’s best for me. The fact is, like any insurance policy, it can be somewhat customized for your needs.

Now back to those questions.

Should you insure your Mini 3/Mini 3 Pro?

To answer the question in a roundabout way, let’s look at a scenario, something any of us could find ourselves in, and maybe we’ll find our answer.

It’s a beautiful day, the sun’s shining and there’s not even enough wind to mention. You’re having a very nice flight; everything is great.

Then suddenly, you see a jump in the viewscreen – weird but, ok. Then a warning pops up in the upper right-hand corner. It happens quick; you didn’t even catch what it said.

The footage on the screen is bouncy and seems to be spinning, not the stable view you are used to.

You look up and find the aircraft in the sky. It’s reacting strangely, jumping around some and spinning around, and doesn’t seem to be responding to the commands you’re giving.

Or it is as if those commands seem to be the opposite of what you’re inputting. You’re trying to guide it back to yourself, and then, then it happens.

It just drops from the air. Its crash site is hard to see as it has dropped down on the other side of a building.

You head over to the area where it came down to discover it has damaged a large pane of the glass window of a business. It must have smacked into it pretty good – it cracked the glass, but didn’t break it entirely.

Your drone is in pieces at the base of this window, and of course, the crash has attracted the attention of those inside.

They go through the list of emotions one goes through in these situations: first, they’re mad, very mad. Then they calm down and understand it was an accident.

Now it’s time to fix it. So, let’s stop right there.

Here we have a situation where the pilot is responsible for the damage that was done by the drone crashing. There is no debate; the pilot is the responsible party.

They are not only responsible for the damage to the window but to the aircraft as well.

In this situation, what we simulated was a motor failure. Some of you more savvy pilots might have even caught it from the description. A motor failure can happen to the best of us at any time.

As a drone pilot, you take a risk with every flight you take.

In the worst-case scenario, you hurt someone on the ground with your aircraft. You, as the pilot, would be just as responsible as in this story of a fictional pane of glass.

So, what’s the damage above going to run us?

One thing is the bad blood the crash will generate. Many people fear drones for one reason or another, and an incident like this just provides them with more ammo to use to support their fears. So, handling this in the best way is best.

So, let’s say it’s a 6 ft by 8 ft pane of glass we need. It’s tempered glass and tinted. We would be looking at anywhere from $2,000 to $4,000 to replace that cracked window. Plus, the loss of the craft itself.

That’s not pocket change, and without having some sort of liability insurance that is going to be coming out of your pocket. I think we have our answer, then.

Always protecting yourself with the bubble of insurance is a good idea.

Accidents aren’t accidents because we plan them; they’re accidents because they can happen to anyone at any time.

Types of Insurance

I think we answered the first question fairly well. The second question we asked, though, is a bit more complicated.

When we discuss insurance for drone systems. We’ll find that there are two main proponents to this type of coverage. The first is Liability Insurance. This type of insurance is to protect you in the event you damage someone else’s property.

Then there is Hull Insurance. Hull insurance is to protect your investment or your property. Don’t fret. We’ll cover each one a little more individually.

Liability Insurance

As we mentioned above, liability insurance is just like what you find with your car or home policy, and it covers you in the event that someone is hurt, or their property is damaged.

In our scenario above, this is the insurance that will cover the window that was damaged. That $2,000 to $4,000 would be covered by this type of insurance. Of course, like your car or home insurance, there may be a deductible and a limit to the coverage.

When setting up this type of insurance coverage you will select the amount of coverage the policy will carry. Anywhere from $500,000 to a million or even higher. This is a choice you will make when choosing your plan.

Why so high? This is a question you may be asking.

In our scenario, we used a glass window. Keeping in that venue, what if that glass window is 10 stories up, and the cost to replace it is in the 10’s of thousands.

Having that protection is certainly needed in that situation and is the reason for such high limits.

You don’t know what amount of potential cost the damage that a crash may cause. It is for this reason that you will want an amount higher than the potential cost for any damage you may cause. Let’s move on to Hull Insurance.

Hull Insurance

This type of insurance is for your own personal belongings, such as the Mini 3 / Mini 3 Pro itself. This type of insurance would replace your aircraft in the broken window scenario we used above.

Hull insurance goes beyond that, though, and you can also insure the control station, the phone or tablet you use, down to the carrying case it is all contained in.

Hull insurance is very versatile to what you decide to cover or not, as this coverage deals with the replacement of your belongings and is not just related to accidental loss. It can tend toward the pricier end of things when we discuss drone insurance.

On my own policy, for example, it is the Hull insurance that runs me the most and is around two-thirds of the total policy cost. Now, I do cover all of my essential gear, though. For me, it makes sense. For you, it may not.

There are other things to consider, like your phone. It may be covered under its own protection policy through the carrier you have, so adding it to a Hull policy wouldn’t make any sense.

If you have Care Refresh, adding the system to a Hull policy would be unnecessary as it’s covered under the Care Refresh coverage it has.

So, no, Hull insurance isn’t going to be for everyone. Just know it’s there if you need it.

The cost

Here I could put something cute, something like: “The cost of insurance is only outweighed by the cost of your peace of mind.” I know, right? Cheesy!

The fact is that with what we do, we should be protecting ourselves from losing everything due to an accident, which could very well happen.

For the most part, just having a Liability policy is good enough and can be found relatively cheaply.

When you add in Hull coverage, these policies can get a bit out of hand, with the cost of that coverage skyrocketing the policy as a whole.

For one, if you have Care Refresh, as many do, having the Hull coverage isn’t needed as the aircraft is covered to some degree elsewhere.

» MORE: Is DJI Care Refresh Worth It? Here’s My Opinion

Then there is the cost of the craft itself and if it warrants a policy or if that wouldn’t make sense, as most Hull coverage policies require a deductible, typically $500. To cover a Mini 3 or even the slightly higher-cost Mini 3 Pro, it doesn’t really make sense.

As there are many companies to choose from, we’ll not try and list any actual pricing, just know that a basic 1-million-dollar liability policy should be well under $500 for a year of coverage and can be found for even less than $250 a year with some companies.

Now, I did mention earlier in this article that some insurers even offer hourly coverage. This is true, and if you do not need full-time coverage, this could be a good option for you. Let’s take a closer look at that.

The 1-Hour Plan

Some drone insurers offer a limited-time coverage policy, typically in one-hour periods. Now with this type of coverage, it would only be for liability coverage. These types of plans do not offer Hull coverage at all.

It’s pretty straightforward. You arrive at a location you intend on flying at, open the insurer’s app, and select the time of coverage.

This will generate a policy for that time period and location. Pay the small fee, and you are covered for that period.

The fees for one hour of coverage can run anywhere from $4.00 to $20, depending on your location. You may be wondering why it wouldn’t be the same everywhere.

In this case, the insurer has done an assessment and determined there is more risk in one area over another.

We know this is true. Flying alone in the country isn’t as risky as flying in a metro park. The cost for coverage per hour reflects that.

This type of coverage can be suitable for the pilot who doesn’t fly very often or flies mostly in rural areas and only occasionally needs coverage when migrating to more populated areas.

Whether this is a cost-effective measure for you, only you can decide that.

What Do I Think?

I think that for the very same reasons you would insure your auto, you should insure your aircraft. One should never lose sight of the fact that we operate flying machines. By their very nature, when something goes wrong, it goes wrong in a big way.

With an aircraft like the DJI Mini 3 or the Mini 3 Pro, having and maintaining a Hull policy isn’t really recommended.

With the deductible most Hull policies have, it doesn’t make much sense cost-wise, and you can always go with Care Refresh as a good option. That’s for your aircraft, though.

Having and maintaining a Liability policy is just a good, smart operating tactic.

It doesn’t matter if you’re a hobbyist or a professional pilot. One crash involving a bystander or valuable property and you could lose everything you have ever worked for.

That is the level of risk you and I take when we take to the air and fly.

Now as a commercial pilot, I have and maintain both Liability and Hull coverage. Of course, the Hull policy I have covers all of my aircraft.

For this coverage, which is a 1-million-dollar Liability and Hull policy. I pay $719 a year, with that covering five aircraft and assorted other items.

Now, this has come down over time from a number that was a bit higher. If I remember correctly, it was originally almost $1,000 for the year or just shy of it.

I was able to reduce costs by providing my flight logs and proving that I am a safe flyer. Plus, having maintained the policy for a longer period of time. I think I’ve been with this carrier now for four years, maybe five.

Also, when I find myself in need of additional coverage, which has come up a time or two, I am able to supplement my yearly plan with an hourly plan. So, only having that extra coverage when needed.

You protect yourself when you drive. Doesn’t it just make sense to protect yourself when you fly? I think it does.

Fly Safe, Fly Always, Always Fly Safe!

• SUASNews
• Posted By

AirModo Drone Insurance App Partners with Unmanned Safety Institute for Safety Benefits

AirModo is a new instant drone insurance app that allows unmanned aircraft systems (UAS) operators to purchase either hourly or annual policies to suit their growing business or hobby.  The app, available on both iOS and Android platforms, provides options to buy insurance for a single drone or a fleet, add multiple pilots, and purchase on-the-spot insurance with policy documents generated and sent via email once operators have made their payment.

Now, in addition to a fast and convenient app experience, AirModo has partnered with the drone industry’s most recognized provider of professional training and safety services, the Unmanned Safety Institute (USI).  All policies purchased on AirModo’s app accumulate SafetyPoints, which can be used with USI.

“The fun and excitement associated with recreational drone use, or the enormous value proposition derived from commercial UAS operations, can disappear in an instant in the event of an incident or accident,” commented Josh Olds, President and CEO of the Unmanned Safety Institute. Olds continued, “Even with today’s UAS becoming more capable and sophisticated, risk management remains the responsibility of every operator.  We worked with AirModo to provide an incredibly wide selection of safety related products and services that can elevate individual pilots’ knowledge and skills and enhance organizational commitment to safe, effective, and efficient operations.”

AirModo’s Andrew Spiegel added, “AirModo recognized the ‘anywhere, anytime’ need inherent in drone operations throughout the recreational and commercial marketplaces.  With the AirModo app, our customers can select custom coverage, instantly access their insurance certificate, and initiate in-house claims service.  Because AirModo believes that the best risk mitigation strategy is a well-trained pilot using industry best practices for safe operations, we are happy to announce that every AirModo policy issued earns SafetyPoints that can be redeemed for a wide variety of safety-related products and services from USI.”

The AirModo app is available for download in the App Store for iOS devices or the Google Play Store for Android devices.  To see more about the wide variety of safety-related products and services available from USI, please visit: https://www.unmannedsafetyinstitute.org/airmodo and to learn more about AirModo and to see how it compares, please visit https://www.airmodo.com/

• InsideUnmannedSystems
• Posted By

AirModo Introduces Usage-Based Drone Insurance App

NEW YORK—AirModo is a new instant drone insurance app that allows unmanned aircraft systems operators to buy either hourly or annual policies to suit their growing business or hobby, the company announced.

The app, available on iOS and Android platforms, provides options to buy insurance for a single drone or a fleet, add multiple pilots and purchase on-the-spot insurance with policy documents generated and sent via email once operators have made payment.

The AirModo app is robust, simple to use and easy to keep up to date, the company said. Commercial pilots have the option of hourly coverage, or the comfort of knowing their fleet is protected year-round wherever they fly with the annual coverage option. Recreational pilots only pay for what they need with the hourly coverage option.

In addition to AirModo’s fast and convenient experience, all policies purchased on AirModo accumulate SafetyPoints that can be redeemed for a wide variety of safety related products and services from the Unmanned Safety Institute (USI), AirModo said.

“AirModo recognized the ‘anywhere, anytime’ need inherent in drone operations throughout the recreational and commercial marketplaces,” said AirModo’s Andrew Siegel. “With the AirModo app, our customer can select custom coverage, instantly access their insurance certificate, and initiate in-house claims service. Because AirModo believes that the best risk mitigation strategy is a well-trained pilot using industry best practices for safe operations, we are happy to announce that every AirModo policy issued earns SafetyPoints that can be redeemed for a wide variety of safety related products and services from USI.”

• EarthOfDrones
• Posted By

Drone Insurance – Why Is Better To Have It