Carter Jonas
Carter Jonas

Drones are useful, but check your insurance

Drones can’t help but make the news – coverage on television over Christmas included a spectacular near-miss involving a downhill skier and a drone that just missed him and then disintegrated on impact with the ground.

Carter Jonas was an early adopter of drone technology, with the rural sales team in particular finding them a valuable tool for providing aerial overviews of larger properties.

UK farmers have also been keen on using drones for aerial crop mapping. In Japan, more than 2,400 drones spray almost half of the country’s rice crop.

But it’s key to remember that as drone technology continues to evolve, insurance will inevitably be required to protect against emerging risks. Insurers face dealing with a vast array of legal, regulatory and commercial uncertainties.

Most standard forms of drone insurance cover third party liability, physical loss and damage to the components during transport or operation. Since drones have numerous different applications, policies may need to be tailored to include professional indemnity; employers’ liability; product liability; cargo liability; terrorism; war; and hijacking.

Drone insurance is often viewed under the general umbrella of aviation products, but there are key differences between drone and general aviation risks. Drones, for example, can be used for surveillance and 

data-gathering, and the risk of a privacy or cyber breach could present potentially expensive issues for insurers.

Insurers cannot easily assess the competence of the operators they insure. Therefore the development of a central database and standardised CAA licensing for drone operators are likely to be important features in the future.

In addition to these commercial issues, drone insurance presents various legal and regulatory headaches. Regulation of drone insurance is in its infancy. EU Regulation 785/2004 has established a minimum third party insurance requirement of €660,000 for commercial drones that weigh between 20 and 500kg but, in a report published in March 2015 (the EU Committee Report), the EU Committee of the House of Lords recommended that this minimum be increased. With that in mind, it’s worth reviewing regularly your policy limits.

The pressure for compulsory registration of commercial and civilian drones is likely to intensify. The EU Committee report recommended that all commercial drones should be registered online but the government’s response has been cautious, recommending careful consultation and suggesting that over-regulation should be avoided in order not to stifle growth in drone technology.

What’s essential is to ensure you check cover carefully before using drones on your farm or estate and to discover exactly what licensing you may need before you use one.

Tim Jones

Tim JonesFRICS

Partner - Head of Rural Division

Tim is head of the firm's Rural Division and of the Cambridge office, although he spends a considerable amount of time in London.  He has over 20 years experience in advising institutional and pri...

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