While a commercial drone that weighs only a few kilograms can create havoc, the resulting damage and liability costs can be much higher than one would expect. A construction or agricultural drone that crashes into a passing car, damages a building, or causes injury requires the company to pay for repairs and cover any resulting liabilities and legal fees.
Get right expert advice
Hassle-free policy
Speedy Claims
Let's say you are using a drone to check out a commercial building. While you are trying to get a good picture, the drone malfunctions and crashes into a passing car. Not only do you have to shell out money for repairs or a new drone, but also for the damages the drone caused to the car
If the drone malfunctioned and hurt someone, the costs could balloon: medical bills, settlements, lawyers, and more. All that, just because you didn't consider the risks involved in drone usage, despite the dangers. That's why looking just at the cost of the drone, and nothing else, is a good way to misrepresent the potential problem.
A single incident can give rise to multiple expenses.
The aircraft itself could suffer body damage, motors, batteries, navigation systems, or other components. A commercial drone can carry high-value cameras, LiDARs, thermal imaging and other equipment. The cost to repair or replace these components can add up significantly.
The drone could collide with a building, vehicle, machinery, glass façade, power equipment or another object. The resulting claim can involve repair or replacement costs, depending on the circumstances of the incident.
The scenario escalates if the aircraft falls on a person or collides with someone during operation. A third-party claim can involve bodily injury expenses, compensation and legal costs.
Not all incidents are quickly resolved. A disagreement can involve legal representatives, documentation, investigation and negotiations before resolution. Eligible legal defence costs, depending on the policy, may be covered by the insured.
For many commercial operators, the drone is a tool for a larger project. The damaged aircraft could delay a property survey, stop an agricultural monitoring effort or interrupt a filming assignment. The resulting business interruption loss may not be automatically covered by a liability policy and needs to be reviewed.
Third-party liability insurance policies cover damage to other people caused by the drone. As per the Drone Rules of India, it is mandatory for a person to take third-party insurance for any unmanned aircraft (except nano drones) carrying out flights in India, which provides cover for death, bodily injury or property damage arising from a mishap. Thus, such insurance policies do cover property and bodily injury occurring to others. Coverage Includes:
Coverage Note: It is important to note that the third-party cover in the drone policies covers the liability of the drone operator and not the drone itself.
If your drone crashes into a building, a third-party liability policy might cover the liability to the building owner, subject to the terms of the policy. However, the cost to repair your own drone would usually require appropriate damage or hull cover.
Depending on the product, this could provide cover against specified accidental damage to the aircraft.
Where cameras, sensors or other specialist equipment are covered, there may be additional or extended cover for the payload.
Some products may offer cover whilst the drone or equipment is in transit, subject to terms and conditions of the policy. Availability of these covers will depend on the insurer and the product, and businesses should not assume that all policies offer the same cover.
There is no one-size-fits-all premium for commercial drone insurance. Each company evaluates the exposure on a case-by-case basis according to the specific characteristics of the aircraft and its intended use.
The higher the purchase price of the drone, the bigger is the own damage exposure.
A drone performing aerial photography over private land does not pose the same risk as a machine used for infrastructure inspections, construction surveys or agricultural applications.
Flying near crowds, over roads and around industrial objects often involves higher liability exposures.
Carrying infrared or LiDAR equipment or standard photography gear can increase the insured value of the drone.
The selection between third-party liability only and an expanded policy covering hull, payload or other items will produce different results.
Past losses and claims can affect the underwriting decision and premium.
The training, procedures, maintenance and other factors related to the operator can affect the risk assessment.
This is not an exhaustive list, as each insurance company considers various other elements when determining the final premium.
Imagine a surveying firm owns a professional drone worth ₹3 lakh. It has a high-end camera. They fly the thing, but suddenly it crashes into a parked car because an operator lost control.
Now, what will the costs include? Drone repair/replacement + camera repair/replacement + vehicle repair/replacement + legal/claim expenses + project delay
The amounts can vary from any figures depending upon the damage. Hence, saying that the maximum loss would be only ₹3 lakh (the drone cost) would be wrong. The third-party liability may exceed the value of your own aircraft.
Insurance works by transferring certain financial risks from the operator to the insurer, subject to the terms of the policy. For a commercial drone operator, the protection may be structured around two broad areas:
| Risk | Potential Protection |
| Drone damaged in an accident | Own-damage/hull cover, if selected |
| Camera or sensor damaged | Payload/equipment cover, if available |
| Drone damages a building | Third-party liability cover |
| Drone injures a person | Third-party bodily injury liability |
| Legal claim following an accident | Eligible defence costs, subject to policy |
| Drone damaged during transport | Transit cover, where available |
| Drone lost or stolen | Specific theft/flyaway cover, where offered |
The exact inclusions, sub-limits, deductibles and exclusions depend on the drone insurance policy.
A low premium is not the sole consideration.
Consider the Risk Involved: Begin by defining the location the drone will fly over or near, what it will carry and what could possibly go wrong.
Distinguish Between Liability Coverage and Own Damage: Find out if the policy covers only third-party liability or if it also includes your drone and its payload.
Scrutinise the Limits of Liability: Establish that the limit of liability will be sufficient given the environments the aircraft will fly in.
Examine the Exclusions: A seemingly complete policy can fail to account for an activity or type of damage that the business owner considers important.
Become Familiar With the Claims Procedure: Make sure that reports of incidents will be accepted within the required time frame and that the documentation needed is available.
Review the Policy as Circumstances Change: Expanding from aerial photography to construction inspections or adding new aircraft to a fleet may greatly impact the level of risk.
Final Thoughts
Commercial drones are transforming the construction, agricultural, surveying and photography industries and are crossing into new markets every day. But with every takeoff comes a potential for financial risk. The key is to shift the focus from the question "How much does my drone cost?" to "What can my drone damage or disrupt if it is not operating at maximum efficiency?"
This is where the right Drone Insurance can make a difference. Policies offering third-party liability coverage can help protect against eligible claims regarding others' property, while the appropriate own damage and equipment coverage can help protect the drone itself. The exact details will depend on which policy the business selects.
Insurance
Calculators
Payment Methods
Secured With
Follow us on
Expert advice made easy
