Monday, November 13, 2023

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Taking flight: why drone insurance is important for commercial use

The global market size of commercial drones is forecast to grow in the coming years. From capturing breathtaking footage to 3D mapping, product delivery, and use in construction and agriculture, Australia is embracing drone use. With the uptake of drones to support jobs across the economy, drone insurance or insurance for remotely piloted aircrafts (RPA) becomes essential for businesses. This article takes a closer look at why you should consider drone insurance and how to secure it.

Why is drone insurance important?

Depending on their sophistication, drones can cost anything from $30 to more than $10,000. While there are fewer claims made due to pilot error today than in previous years, the crash risks are acute.  Claims data reveals that one in fifty drones will be involved in an accident, the equivalent of a crash occurring roughly every 2,000 hours of operation.

The top 10 reasons for drone insurance claims in 2022 were:

1. Pilot error

2. Loss of data link

3. Accidental damage

4. Mechanical failure

5. Bird strike

6. Loss of power

7. Accidental loss

8. Fly away

9. Battery failure

10. Weather damage

Source: Statista, 2023

How do I qualify for commercial drone insurance?

In Australia, drone insurance for commercial or private use involves cover for third-party damage and bodily injury claims arising from the operation of a drone.

You need a Remote Pilot Licence (RePL) at a minimum and potentially a remotely piloted aircraft operator's certificate (ReOC). The ReOC covers the entirety of a company's drone operations, while the RePL must be held by an individual drone pilot.

If you fly drones for business or as part of your job, they must also be registered. However, there are some circumstances where you do not need to register your drone, such as when:

  •  You don’t intend to fly your drone
  •  You’re only flying for sport or recreation, including model aircraft flown at CASA-approved model airfields
  •  You're a commercial drone repairer or manufacturer (you must keep records)


How do I remain compliant?

If you are caught flying an unregistered drone for business use or as part of your job, you can be fined up to $13,750.

It is important to note that drone users are breaking laws by flying in restricted areas and over people. The Civil Aviation Safety Authority (CASA) is responsible for regulating drones in Australia. According to CASA regulations, drones must be flown below 120 meters and must not be flown within 30 meters of people. 


Next steps

To find out more about how drone insurance can help protect your business from liability claims, please reach out at any time.

Chris Papakostas

Senior Client Executive

Honan Insurance Group Pty Ltd (Honan) (Australian Financial Services Licence no. 246749, ABN 67 005 372 396) is an insurance broker acting as agent for insureds and intending insureds. Honan is not an insurer.  The information in these articles are current as at the date of first publication and have been prepared without taking into account your objectives, financial situation or needs. Any advice provided in these articles is of a general nature only. Any statements concerning tax, accounting or legal matters are based solely on Honan’s experience as an insurance broker and are not to be relied upon as accounting, tax or legal advice. Before making a decision to purchase an insurance policy, please read the relevant Product Disclosure Statement to make sure the policy is right for you.  Insurance cover is subject to policy terms and conditions including policy limits and exclusions.

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