Inquiries surrounding insurance products for unmanned aerial systems (UASs) – commonly called “drones” – have increased substantially in 2014 as the commercial opportunities afforded by the new technology become better understood.
In the US, the rise of interest in drone coverage has been driven by preparation for the Federal Aviation Administration (FAA) to open commercial airspace. Technological innovation and a decrease in cost have resulted in technology once confined to governments and the military being used in operations such as real estate, electronic news gathering, power-line and pipeline patrols, search and rescue, and managing livestock and agriculture.
The market is working on new products to cover hull, general liability, products liability, and property damage risks resulting from drone use.
The risks involved in the commercial use of drones remain largely unknown. Nevertheless, we expect to see capacity to underwrite drone policies increase as insurers become more familiar with the expanding private sector use of the technology.
Excerpted from Marsh’s Global Insurance Market Quarterly Briefing – July 2014. Read or download the report.