Unmanned aircraft technologies or so-called "drones" today come in a variety of sizes and types, from model aircraft for personal use, to large fixed wing aircraft used by the military. The commercialization of drone technology is just getting started and it appears to have enormous future potential.
Insurance coverage for drone operation is absolutely essential for that progress to take place.
Drones in some form have been around since the 1800's, with military uses being one of the primary drivers in drone development. Today drones are used is innumerable walks of life and lines of business. These include use of drones for insurance underwriting and claims, crop management, film making, journalism, disaster management and a large number of other applications.
Both the United States and Canada have federal rules regulating the use of drones, with the ultimate goal of normalizing the use of drones in their respective national airspace. While drone use in Canada has been largely uncontroversial, much attention has been focused on how the FAA regulates drones in the United States.
In recent years, the FAA has been active in enforcing its drone regulations, primarily seeking to stop commercial use of drones by operators who haven't received its permission. Both recreational and commercial operators face a number of potential legal issues when they fly their drones. Invasion of privacy is probably the biggest concern, followed by physical damage and bodily injury in case of, for example, a drone crash.
These potential legal issues, combined with the uncertain regulatory atmosphere in the US, make insurance underwriting for drone liability a challenging endeavor. The goal Swiss Re's recently-published white paper "Insurance and the rise of the drones", of which I'm one of the authors, is to explore the development and use of drones and identify the attendant legal and practical issues to help insurance companies and their clients in the United States and Canada to accurately assess and underwrite the risks posed by the use of drones. Click here to read the white paper.
We'd love to hear your thoughts - what do you think is the biggest concern regarding drones for the insurance industry?
Location: United States