MDJ Starter Kit: Insurance


Insurance is fun right? Not exactly. But you’ll love insurance when you crash your drone and don’t have to file for bankruptcy. Although you don’t need a policy to fly commercially in the U.S. (but you do in Canada), your wallet and your therapist will thank you for getting one. Insurance can get complex, and some of this information may not be applicable to everyone. However, anyone serious about incorporating drone’s into their business model should at least invest some time into talking about best insurance practices.

Types of Insurance

Liability insurance

  • Base policy
  • Covers property damage claims and bodily injury claims
    • Basically, if you crash into something that’s not yours, you will have to pay for it. Liability insurance will have you covered.
  • Must have before adding any other insurance

 

Hull insurance

  • Covers any damage to the drone
    • Basically, if you crash at all, you can insure the actual drone so that you don’t have to pay for repairs to get back up in the air.
    • By the way, these repairs can be just as expensive as the drone itself.
  • Policy’s monetary amount must be accurate to the value of the craft
    • This will decline over time, just like any other vehicle.
  • Be aware of deductibles
    • Expect 5-10% of value

 

Payload insurance

  • Covers equipment added to the hull of the UAV
    • Added to an insurance policy separately
    • Must be accurate to the value of the equipment
  • Deductibles will likely be the same as hull insurance

 

Ground Equipment insurance

  • Covers anything added to the operation from a control standpoint
    • Laptops, controllers, sensors, etc.
  • Similar rules like value of equipment and deductibles

 

Non-owned insurance

  • If you’re renting/leasing/some other form of using a drone you don’t own
  • Non-owned can be applied to hull, payload and ground equipment

 

Personal injury insurance

  • Covers damages due to personal injury
    • Protect against slander, libel, violation of privacy and copyright infringement claims while using your drone

Costs and Types

Each policy will vary due to what you have covered up to what monetary value. If you are a larger company and plan on flying a lot, you probably want a more comprehensive plan. These plans will also give you more freedom as to when and where you can fly. Consider all of your equipment and how often you fly. If you are a smaller company or fly infrequently, perhaps a yearly plan does not make sense with your budget. Luckily, you have options.

    • Insurance Companies: Comprehensive Plans
      • Here is a list of companies that will give you drone insurance policies.
      • A commercial insurance policy for a DJI Phantom 4 or Yuneec Typhoon H covering liability up to $1 million can run as little as $600-$800 a year
      • Pros: Lots of types of insurance, lots of freedom
      • Cons: Can be expensive and complicated
    • Verifly: Insurance on demand – Get the app
      • This app provides liability insurance on demand
      • As little as $10/hour of flight depending on the set parameters

 

  • Pros: Very cost effective, quick and easy
  • Cons: Strict time and space parameters, only covers liability

 

Can you lose your insurance?

Apparently so. Here are some tips to make sure this doesn’t happen.

  • Log flights
  • Be able to prove what happened in an accident with flight data
  • Register your drone and attach the correct ID number to its hull
  • Log battery cycles and all equipment changes
  • Practice good flying

 

Overall, you can decide how complicated you want your drone insurance to be. However, every company should invest in some form of drone insurance. Without it, you could hurt both your drone and your wallet.

 

Information on this page comes from UAV Coach and Verifly.