Page 29 - Insurance Times February 2021

of the public may not be able to obtain adequate Risk coverage:
compensation, or do so easily, from the drone operator. Drone crashes are the most frequent type of insurance
Various government bodies and especially police have been claims. These crashes can be of different types, including bird
using drones in their fight against the coronavirus pandemic.
hit, lightning strike, any mid-flight physical damage (e.g.
overhead wire hit). Though the
regulator (aviation regulator)
has made mandatory the third
party insurance, the
compensation to be on the lines
of the Motor Vehicles Act is
somewhat not in line with
international practices.

According to the working
group, the structured basis
formula payment on 'No Fault
Liability' can be considered
while designing the insurance
product. There is a need to
standardize the product
feature. Only a handful of
products are available for
drone operators. Plus insurers
have tough conditions on the location where drones can be
Panel for insurance of drones: used. The panel also said that drone insurance coverage can
Drones are playing a significant role in the current Covid-19 be broken into three categories - physical damage or loss
situation, assisting various authorities in several activities. to drone due to various contingencies, third party liability
There is an immediate need to make available suitable arising due to usage of drone and any additional coverages.
insurance products covering the various risks involved in the
use of drones. The IRDAI has formed a working group to This insurance does not apply to any liability arising out of
suggest insurance products covering the various risks or connected directly or indirectly with any aircraft product
involved in the use of drones. There is an immediate need or any missile or spacecraft or aerial device including any
to make available suitable insurance products covering the article, equipment, material, part or spare part installed or
various risks involved in the use of drones. otherwise incorporated in, on or under any aircraft, missile,
spacecraft or aerial device or furnished or used in connection
Drones are emerging as one of the fastest growing with air or space communication, guidance or navigation
technologies and are being used for a variety of purposes system Meanwhile, the non-availability of claim data for
and were playing a 'significant' role in the present Covid-19 drone losses and lack of reinsurance support for unlimited
situation helping the authorities in several activities. The liability is seen as concerns in developing a feasible drone
nine-member panel has been asked to study and understand insurance ecosystem.
the insurance needs of Remotely Piloted Aircraft System
(RPAS) owners and operators. Drone insurance coverage can be broken into three sets -
physical damage or loss to drone due to various
Apart from making recommendations on design and contingencies, third party liability arising due to usage of
development of products meeting the needs of RPAS owners drone and any additional coverages. While drone operators
and operators, including third party liability, the group will continue to have minimum levels of insurance such as third-
suggest measures relating to underwriting of different risks. party liability cover, the committee on remotely piloted
This move has come in the backdrop of drones emerging as aircraft systems/ drone technology said this may not be
one of the fastest growing technologies and being used for comprehensive enough to address the requirement of drone
a variety of purposes. Their numbers are growing rapidly. operators.

The Insurance Times, February 2021