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Commercial drones, or unmanned aircraft vehicles (UAVs), have already shown the ability to increase business efficiency and make various practices – including safety analysis – more cost-effective. As the benefits of drone use in business continue to be revealed and the associated technology continues to improve, more commercial drones are being put into use every week. In fact, an average of 1,000 commercial drones are registered with the Federal Aviation Administration every week. As with any emerging technology, drone usage comes with risks and associated potential liability. As the industry continues to experience increased regulation, the potential for expensive liability claims is correspondingly increasing. Below we explore the liability issues when insuring commercial drones.

Drone Insurance

Right now, in the United States, businesses using drones are not legally required to insure them – and drone insurance is also not currently required for recreational use. However, some situations and endeavors will necessitate a certificate of insurance, so in addition to liability mitigation, drone insurance might be necessary for other reasons. In order to film via drone, many cities and/or states require proof of insurance, for example. 

Most drone companies have only been able to use traditional insurance to manage risk. Since the FAA defines a drone as an aircraft, it is subject to aircraft insurance exclusions. This insurance conundrum, as the industry propels itself forward to keep up with burgeoning technological advances, leaves us with the following potentially recommended drone insurance coverage options (and this list is not exhaustive) to consider: 

• Commercial Drone Liability Insurance
• Commercial Drone Hull Insurance
• Payload Insurance
• Commercial Property Insurance
• Aviation Product Liability Insurance
• Non-Owned Aircraft Liability Insurance
• Cyber-Liability Insurance
• Errors & Omissions Insurance (E&))
• Intellectual Property Insurance
• Commercial Crime Insurance
• Foreign Commercial Insurance Package 

Liability drone insurance policies typically start at $500,000 worth of coverage and can be negotiated upward from there. You can also buy liability insurance on demand, meaning you only pay for the time your device is up in the air. Hull insurance consists of insuring the actual drone itself and can be purchased privately or through the manufacturer. In addition to insuring against accidents, hacking, and other incidents that could expose your business to liability and insuring the actual device against damage, be sure to consider insuring the ground equipment needed to effectively run and capture data and video from a commercial drone, including ground stations, laptops, remote controllers, and more.

Florida Drone Insurance Law

While the federal government does not specifically require drone owners and/or operators to carry drone insurance, state laws can and do; those laws vary by state. To fly a drone as a commercial pilot in the state of Florida for work / business purposes, you must adhere to the requirements of the FAA’s Part 107 Small UAS Rule (Part 107), which includes passing the FAA’s Aeronautical Knowledge Test to obtain a Remote Pilot Certificate. In addition, according to the Florida Department of Transportation and the Florida Legislature, Florida has four state-wide laws concerning the use of drones in the state: 

1. HB 1027: Only the Florida Legislature can make laws concerning the use of drones in the state. Local governments can enact ordinances to prevent and address nuisance and other illegal acts. Prohibits the operation of drones over or near critical infrastructure or possessing or operating weaponized drones.
2. SB 766: Prohibits using a drone to capture images of privately owned property or its occupants without consent.
3. SB 92: Defines what a drone is and limits the use of drones by law enforcement. Allows someone harmed by the inappropriate use of drones to take civil legal action.
4. Florida Administrative Code 5I-4.003: Prohibits drones on managed land without government authorization (e.g., state parks and forests).
5. Florida Administrative Code 40C-9.320: Prohibits drones from taking off or landing on District lands unless authorized. 

In addition to these statewide Florida drone laws, local authorities have enacted relevant ordinances in Bonita Springs, Miami, Defuniak Springs, Orlando, Pinellas County, Lake County, The University of Tampa, and the Canaveral Port Authority, among others.

Drone Liability Issues

Purchasing commercial drone insurance reduces the liability exposure of a business that uses drones as part of its commercial operations against: 

• Claims made against manufacturers under the theory of product liability
• Claims made against businesses and other operators for property damage, bodily injury, and financial damage
• Claims made when a cybercriminal hacks a drone, called spoofing, which can reveal sensitive data and allow hackers to harm others
• Claims made that drones violate privacy laws should they accidentally venture into residential airspace
• Claims made when drones are used in international airspace that violations of other countries’ laws and regulations have occurred

Florida Insurance Coverage Attorneys

Running a business is challenging enough without having to worry about liability exposure for injuries or property damage caused by commercial drone usage. Having the right insurance depends on the type of business you run. If you are concerned about liability issues when insuring commercial drones, the experienced insurance coverage attorneys of Conroy Simberg are an excellent resource.