Page 34 - Insurance Times February 2021

The report comprehensively covers the market by types, Guideline No 285/2010 that provides that an aircraft
applications, and regions. The report provides an unbiased operator (including UAS) flying over the territory of executive
and detailed analysis of the on-going trends, market share, committee member state should have an insurance cover
opportunities/high growth areas, and market drivers which which is dependent on Maximum Take Off Mass (MTOM) of
would help the stakeholders to device and align their market the aircraft concerned. For MTOM of up to 500 kg,
strategies according to the current and future market minimum insurance requirement in Special Drawing Rights
dynamics. The increasing use of UAVs in various commercial (SDR) terms is 0.75 million (i.e. equivalent to Rs 7.5 crore).
applications, such as monitoring, surveying & mapping, In India, as the drone usage being in the nascent stages,
precision agriculture, aerial remote sensing, and product we expect the weight of the drones in the market to be
delivery, is also contributing to the growth of the UAV much lesser than 500 kg (may be less than 25 kg) and hence
market. we may look at liability limits lower than the European
guidelines.
The structured basis formula payment:

According to the working group, the structured basis Drones are playing a significant role in the current
formula payment on 'No Fault Liability' can be considered coronavirus situation, assisting various authorities in several
while designing the insurance product. However, the activities. Draft drone rules propose to mandate insurance
unlimited legal recourse brings in an element of uncertainty cover for drones to be eligible to operate. HDFC Ergo
in determining the exposures which are a key concern to recently launched a dedicated drone insurance product, but
insurers and re-insurers in supporting this promising that remains the only product specifically developed for
technology and developing the drone insurance ecosystem drone liability cover so far. The draft says that no drone can
within the country. The group has recommended that the be operated in India without having a valid third party
third party liability insurance be in line with aircraft/aviation insurance policy to cover the liability that may arise during
liability as is the practice in the developed nations. mishaps, causing death or bodily injury to any person or
damage to property.
Based on the discussions with few insurers and re-insurers,
we understand that they (insurers & re-insurers) are Industry estimates suggest that over 330,000 units of drones
interested in providing a Comprehensive Insurance Cover i.e. have been sold so far in India on a commercial basis. During
both Hull (drone body) and third party liability rather than the Covid -19 pandemic, drones are being used in India to
stand-alone liability cover or Hull (drone body). While the check whether people are following social distancing norms.
group wants the global practice to be followed in the case Apart from this, drones are also being used in infrastructure
of third party liability, it wants to deviate from the global and engineering sectors to monitor ongoing projects and for
norms on arriving at the third party liability limit arising out topographic surveys. In the agriculture sector, drones are
of drone operations. It referred to the European Union being used to monitor crop yields and damage due to natural
The Insurance Times, February 2021