Third-Party Drone Liability
An aviation liability policy for drones covers your legal liability for accidents. This includes:
- Bodily Injury: If a bystander (or anyone not employed by you) is hurt by a falling drone or an out-of-control flight, the policy will pay for medical costs, compensation, and legal defense if they sue.
- Property Damage: If a drone collides with someone’s car, building, or other property, the policy covers the repair costs or replacement, as well as legal claims that might result.
- Legal Defense: Importantly, aviation policies typically cover the legal fees to defend you in court (often outside of the liability limit), which can be a significant expense on its own.
This kind of coverage is analogous to the liability insurance that airlines or manned aircraft operators carry – scaled down to the size and risk profile of drones. Depending on your operations, you can secure very high coverage limits (several million dollars or more) to satisfy client and regulatory requirements.
Hull Coverage (Drone Physical Damage)
If your drones or payloads are valuable, you should consider hull insurance. This covers physical loss or damage to the drone itself (and attached equipment like cameras or sensors) due to crashes, operator error, theft, fire, etc. For example, if a expensive survey drone is destroyed in a crash, hull insurance would reimburse the agreed value so you can replace it. Many companies choose to self-insure small drone losses, but for fleets or high-end UAS hardware, hull coverage is a smart safety net.
Product Liability for Manufacturers
Are you building drones, developing flight control hardware, or selling any component that goes into a drone system? If so, you have a product liability exposure. If a defect in your drone or part causes an accident – say a rotor arm snaps due to a design flaw, leading to a crash, or your autonomous docking station malfunctions and drops a drone on someone’s property – you as the manufacturer or supplier could be held liable.
Product liability insurance for drone companies covers claims arising from defective design, manufacturing errors, or even failure to provide adequate instructions or warnings. It’s a distinct coverage because a Tech E&O policy typically will not cover bodily injury or property damage – those fall under product/aviation liability. So a drone company with a hardware element to its product often needs this in addition to professional liability.
Covering Test Flights and Experimental Trials
Drone startups often operate at the cutting edge, conducting test flights, pilot programs, and demos before full commercial deployment. It’s crucial to insure these activities properly. Not all aviation policies automatically cover R&D test flights, especially if they occur outside standard regulatory approvals. When we arrange coverage, we discuss the scope of your operations in detail – for instance, flights beyond visual line of sight (BVLOS), autonomous test missions, prototype aircraft with experimental tech, etc. – to ensure the policy is endorsed accordingly.
The goal is to have coverage from the prototype stage through commercial scale. Engaging insurers early with transparent information about your testing program can prevent coverage gaps (and unpleasant surprises in the event of an accident during a demo or trial run).
Operating internationally
If your drones will fly in multiple countries, your insurance needs to travel with them. Some countries require local insurance or specific policy wording (for example, the EU has mandatory drone liability insurance thresholds based on drone weight). We help clients navigate these rules and can arrange global coverage that satisfies international requirements. This might involve partnering with Lloyd’s of London underwriters or other global aviation insurers, as they have the flexibility and experience to cover worldwide drone operations. We also handle contract-specific requests like naming clients as “additional insured” or providing proof of insurance compliant with foreign regulations.
Expert insurers for a specialized risk
Drone aviation insurance is a niche within a niche. A handful of insurers (often in the London market or specialist aerospace insurers) dominate this space, offering the needed expertise. Working with them means claims – if they do happen – are handled by adjusters who understand drones and aviation law. As a boutique broker, we maintain relationships with these markets, so our clients get the benefit of that global expertise coupled with local support in Israel and the US.
To sum up, Aviation and Product Liability insurance are what keep a drone company’s worst-case scenarios survivable. A serious crash or product-related accident could otherwise be financially devastating. We ensure that from the moment your drone takes off to the final landing, and from the factory floor to the end-user, you have the right protections in place.
Want a second look at your current drone liability coverage? Contact us for a policy review. We’ll assess whether your existing aviation and product liability insurance is adequate for your risk profile, and help strengthen it so you can operate boldly, knowing you’re protected by the best coverage available.
