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Drone Insurance Guide

Everything you need to know about purchasing insurance for your drone.

If you are operating a drone for commercial purposes, drone insurance is not required by law, but highly recommended. It makes good sense to insure your business against damage or injury to others and damage or loss of your equipment.

How drone insurance works

Drone insurance covers the commercial use of unmanned aerial vehicles (UAVs) or, as they are now referred to in New Zealand, remotely piloted aircraft (RPA). If your drone is lost, damaged or causes loss, damage or injury to others, drone insurance covers your liability costs to a certain extent, depending on the policy.

What about recreational use?

In New Zealand most drone insurance policies are designed for commercial purposes only. However, there are a few insurers that offer cover for recreational use. Note: if you operate a drone recreationally, you’re still subject to most of the regulations applying to commercial drone operation.

What type of cover should I get?

You should ensure drone insurance covers your asset, as well as third party liability:

  • Public liability. This provides cover against third-party damage and bodily injury claims arising from the operation of your drone.
  • Vehicle & equipment. This is an agreed value for loss or damage of your drone and operating equipment (often including payload).

In America, where commercial drone insurance is more widespread, cover can include a bigger range of options, such as liability, hull (the drone), payload, ground equipment, non-owned coverage (borrowed or leased drones) and personal injury cover (copyright and privacy infringements).

What types of accidents or liabilities are covered by each policy?

Examples of potential accidents involving drones where drone insurance would be beneficial to have include:

  • Loss or damage of the drone due to loss of control resulting in a crash
  • Damage or injury caused during the crash to third party property or persons
  • Damage or injuries caused to operating equipment, ground crew or onlookers

What affects the cost?

As with any form of insurance, certain risk factors determine how much an individual will pay for drone insurance. When preparing your application for underwriting, your broker will consider some or all of the following factors to determine how much your drone insurance is likely to cost:

  • The number of flying hours you have logged (in aviation, flying hours equates to experience and operational competency)
  • The cost of your drone and equipment (needed for agreed value cover)
  • The size and weight of the drone you are operating (drones in New Zealand must be 25 kilograms or less)
  • Whether you are able to automatically record your flight log and data (required evidence when claiming)
  • Whether you keep a maintenance log and regularly maintain your drone and equipment
  • Whether your drone is owned or leased
  • Where you are operating your drone (i.e. over water, near built-up areas, around hazards such as power lines etc)
  • Whether you have any previous history of drone accidents or loss

Getting drone insurance

Drone insurance is such a specialised field it can be beneficial to hire the services of a broker, rather than buying your insurance directly. Not only does a broker often have access to data you are not privy to, but their sole purpose is to find the right insurance fit for your situation and budget.

By putting together a tailor-made package for you, they can help you avoid paying for cover that you don’t need and ensure you are adequately covered for the things that you do.

Making a claim

Making a claim on your drone insurance is much like claiming on a motor vehicle or home insurance policy. Follow these steps to simplify the process:

  • Notify your insurer as soon as possible after the event.
  • Make a note of the time, place and type of incident and the contact details of those involved, including any witnesses.
  • Notify the proper authorities if relevant (i.e. police or ambulance).
  • Do not make any statements without the insurer’s permission.
  • Do not abandon your drone or equipment and take all reasonable precautions to protect it after the incident.
  • Allow the insurer to inspect the damaged property prior to repair or disposal.
  • File your claim within the prescribed time frame and cooperate fully with the insurer.

Insurance exclusions to be aware

To retain your drone insurance cover, you must always operate your drone in a manner approved of by your insurer. Exclusions from cover may include:

  • Not logging flights and not being able to prove with flight log data what happened during an incident
  • Operating your drone recklessly or in contravention of air safety regulations
  • Not obtaining a unmanned aircraft operator certificate (UAOC) if your drone weighs more than 25 kilograms and not displaying proper identification numbers
  • Not logging battery cycles and maintenance changes

What regulations will you need to follow in New Zealand if you fly a drone?

Whether you operate your drone commercially or for recreational purposes (unless it is a very small drone being operated over private property), you must always observe the Civil Aviation Authority (CAA) Regulations which require that you:

  • Only fly during daylight hours
  • Only fly one drone at a time
  • Only fly by visual line of sight (close enough to maintain orientation and achieve accurate flight and tracking)
  • Not fly higher than 120 metres above ground level
  • Not fly in a prohibited or restricted area without permission
  • Not fly in a way that creates a hazard to another aircraft, person or property

  • Not fly closer than 30 metres to other people
  • Not fly over populated areas (i.e. ovals, parks or beaches)
  • Not fly a drone weighing more than 25 kilograms within four kilometres of an aerodrome with an operating control tower
  • Not fly in the area of a public safety operation without permission (i.e. motor vehicle accidents or police, firefighting or search and rescue operations).

The CAA has developed the following web-based resource to help you better understand the rules:

What are the penalties for breaching drone safety laws

There have been multiple instances of the CAA issuing fines. These range between $500 and $1,000, with the number of fines expected to climb in the coming years as drones become more and more popular. Depending on the severity of the breach, fines can reach as high as nearly $5,000.

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