In addition to compulsory public liability insurance for UAVs, further types of policy may be needed depending on the nature of the commercial activity. Insurance can be bought to cover damage to the UAV itself, damage being defined in the usual insurance sense as destruction, disappearance or “partial damage”. The policy also covers instruments the UAV may be carrying or equipment on the ground, such as a laptop that is used to control it.
Commercial UAVs are widely used for surveying purposes as well as by architects and engineers for construction projects, and such UAV operators may well need professional indemnity [PI] to cover errors or omissions arising out of their work or to be defended against claims for violation of data protection or invasion of privacy. Insurance for increased cost of working would be needed if damage to a UAV could result in extra expense to fulfil a contractual obligation. Insurance should cover the UAV not only in flight, but also when it is being transported. Coverage is usually worldwide, though specific countries will usually be excluded. There are no limits to the flying time.
Although the insurance of model aircraft is not compulsory, those who fly them should obviously have liability cover. Most German insurers are prepared to include them in a personal liability policy, usually for a small extra charge, and policyholders who fly model aircraft should declare them to their insurers.
Of increasing importance for the insurance industry are the services provided by UAVs. Specialized companies use them not only to photograph and film damaged objects, but also to analyze the data recorded, which may not only be visual but also thermal. Three dimensional computer models can show the exact extent of damage, enabling the cost of repair to be estimated. In addition, UAVs obviate the need to erect scaffolding on tall buildings, and in the case of a burning oil rig or a damaged wind turbine at sea, a UAV is a much cheaper alternative to a helicopter and more effective, because it can get closer to the object in question. The French SNCF uses UAVs to monitor its tracks and overhead lines, and UAVs are also used to inspect dykes and other flood defences, risk management measures that ultimately impact positively on insurers’ loss ratios.
It is clear from the rapid growth of this market niche that UAVs present an interesting business opportunity for the insurance…