As new Drone laws and regulations start coming into focus, the market for commercial drone insurance is also becoming more standardized and readily available. This is not surprising—and in some respects mirrors the development of auto insurance 125 years ago (the first auto insurance policies, written in the 1890s, were actually adaptation of horse-drawn vehicle liability policies). We are now being asked with increasing frequency, by both drone operators and those who would contract with drone operators, what kind of insurance is available and should be obtained.
The good news is that commercial drone liability policy is now readily available. As best as we can tell, premiums for policies that cover liability up to $1 Million are in the neighborhood of $800 per year. Interestingly, on-demand policies are also available that provide coverage by the minute for a nominal hourly rate—such policies may be prudent for recreational operators but are unlikely to satisfy those who would seek to do a business deal with a drone operator. In addition to the new license requirement for commercial drone operators, we think carrying drone liability insurance coverage will quickly become an essential requirement for doing business, if it is not already.
With the growing availability of commercial drone liability policies, it is also increasingly clear that general commercial or homeowner’s insurance coverage will not suffice. Obtaining drone-specific coverage is not just smart, it is probably essential for anyone operating a drone-related business. In 2016, the California legislature enacted, but the Governor vetoed, a bill which would have required any drone operator to carry liability insurance at minimum thresholds set by the State—similar to cars. We can expect this bill to be revived, and required in other States. Inevitably, like cars, States will enact laws requiring drone operators to obtain minimum amounts of liability insurance.