Drones, Risk Management and Insurance – What You Need to Know


It seems like drones are everywhere these days.

As a result of their military applications and privacy concerns, drones make headlines frequently these days, but they may also be a part of your business and personal life, thus exposing you to unseen risks.

First, let’s take a look at how liability insurance policies address the use of drones on a personal and a business level, to see how this could affect your exposure for property damage or bodily injury to others.


Homeowner’s Liability

The majority of homeowner’s insurance policies state that they exclude liability for aircrafts, except model or hobby aircrafts which are not used or designed to carry people or cargo. Assuming that your drone is for recreational use only, you should be exempt of liability under this definition in accordance to your homeowner’s insurance policy. We recommend meeting with your agent to confirm that this exclusion and condition is applicable to your homeowner’s policy and that you are fully protected.

Business Liability Insurance

When a drone is owned and/or operated for business purposes, the exclusion is much stronger. The most common exclusion that you will find in an ISO Comprehensive General Liability policy states the following: “any aircraft that is owned, maintained, used or entrusted to others is excluded.” There is not a definition of “aircraft” listed in the standard ISO policy, therefore it would appear that there is no coverage for the use of a drone in business, and you would need to consider purchasing this insurance separately.

Associated Risks

The most significant risk that is associated with the operation of a drone is ensuring that you operate the aircraft safely and comply with all Federal Aviation Administration regulations (FAA). Due to the increased usage of drones in recent years, the FAA continues to evaluate their rules and regulations on a consistent basis. It’s essential that you stay up-to-date with FAA guidelines and have a firm understanding of the current regulations for operating a drone.

In terms of safety, you may think that since a drone is such a small aircraft that it shouldn’t cause any significant property damage or injuries, right? Wrong. It’s important that you consider any potential exposures that may occur when a drone is the catalyst in a chain of events that can potentially result in significant property damage or injuries. A few examples would include: running into an electrical wire or transformer, causing a traffic accident or pile-up or landing near a group of children.

Drones are not going away. It’s important now more than ever that you understand the increased liability for operating a drone and have adequate insurance solutions in place to fill the coverage gap.

Do you have any further questions? Contact one of our strategic risk advisors today to learn more about your drone insurance coverage options.

Posted by: Brian McClone, Strategic Risk Advisor