It was recently announced by the UK government that drone operations for emergency services would receive £20 million in funding. According to a report by Digital Health, in addition to this “drones could be deployed for NHS deliveries under new UK regulations planned for 2026.”
Simon Ritterband (pictured left), managing director and founder of Moonrock Drone Insurance, believes that the ramp-up in industries utilising drones should prompt brokers to be alert to insurance needs. “As the drone industry continues to develop, being proactive in their approach to providing solutions for their customers will allow them to stay ahead of the curve and provide the best possible coverage to their clients,” he said.
According to Martin Jackson (pictured right), class leader of aviation at Apollo, “drones have become an integral part of our everyday life, revolutionising the way we work and interact with our surroundings.”
A recent PwC report highlighted that “with rapidly increasing use in commercial applications, the industry is estimated to hit £45 billion by 2030 and create upwards of 500,000 new jobs.”
Jackson also highlighted some of the current commercial applications of drones:
• Aerial photography & videography
• Real estate
• Construction
• Search and rescue
• Mapping and surveying
• Asset inspection
• Payload carrying
• Agriculture (including crop spraying)
• Insurance claims and loss adjusting
• Mining
• Security
• Entertainment (film and TV, light shows, swarm displays, etc.)
• Emergency services.
Speaking on the possibility of drone usage in other sectors, Ritterband said: “Companies have only scratched the surface of what airborne drones can do. Over the next two decades, businesses will put industrial drones to work in monitoring facilities, tracking shipments, and perhaps very shortly cargo and home delivery.”
With more industries set to use drones, insurance coverage becomes all the more important.
Data from a Coverdrone report revealed that “in 2023, over 50% of claims were due to pilot error. Other frequent causes include loss of data link, accidental damage, and bird strikes.
Some of the key coverage options that can be offered to help mitigate risks include:
1. Operational coverage
2. Cyber and business interruption coverage
3.. Accidental damage & pilot error
4. Liability coverage
As well as coverage, regulatory compliance is essential for drone users.
Speaking on regulation, Jackson said: “We would suggest ensuring that clients comply with the regulations set by aviation authorities such as the Civil Aviation Authority (CAA) in the UK, the Federal Aviation Administration (FAA) in the US, or other relevant bodies. These regulations cover aspects such as drone registration, pilot certification, operational limitations, and safety requirements.”
Jackson also warned that clients should be strongly advised to take up essential coverage:
“Many jurisdictions mandate specific insurance coverage for drone operations. For example, in the UK, drone insurance must comply with EC 785/2004, which sets out requirements for third-party liability insurance for aircraft, including drones.”
When it comes to risk mitigation, according to Ritterband, it is crucial to assess each type of drone operation differently.
He argued this assessment can be broken down into:
Jackson said it is vital for brokers to enquire about drone usage in a variety of sectors: “Ask if clients use drones and familiarise themselves with how they might be using them. You’d be surprised at how many different types of firms use the technology already.”
Jackson added that brokers need to consider that there are various operation types. “Uses include standard operations such as surveys or inspections or use in film and TV,” he said. “Some clients will also be using drones in a more complex way and will require non-standard cover. Non-standard operations include prototypes, sales and demonstrations, BVLOS (Beyond Visual Line of Sight) operations, agricultural spraying, and swarm displays.”
Additionally, it is a broker’s role to tailor the coverage.
Ritterband said that brokers need to find out “whether or not their client needs a customised insurance solution and provide tailored cover that addresses the unique risks associated with non-standard operations.”
He also noted that this may include “higher liability limits, coverage for specific types of operations, and endorsements for advanced technological features like geofencing and redundancy systems.”
Ritterband emphasised that collaboration with industry experts is crucial in order to “help understand emerging risks, stay ahead of regulatory changes and remain up-to-date with industry developments.”
Ritterband predicts that there will be revolutions with specific drone operations: “Operations that require BVLOS approvals are very much on the cusp of a revolution. Once BVLOS permissions are easier to obtain, we’re likely to see a surge in activity such as drone-to-home delivery. Passenger drones, also known as eVTOL, are also an area of growing interest. As that develops, we’re likely to see more and more firms seeking insurance cover.”
A recent report by PwC echoes the predicted surge in the delivery of goods by drones.
According to the report “the value of goods delivered to consumers by drones worldwide will grow by 74% annually, from $251 million in 2024 to $65.2 billion in 2034.”
