Does your business use drones? Did you know that if an incident occurs, your business is probably not insured?

Drones are increasingly becoming an essential tool for industries like roofing, real estate, and construction. They offer efficiency, accuracy, and unique vantage points for inspections and marketing, but they also come with risks.

The catch? Most standard business insurance policies won’t cover those risks.

Why? Drones are classified as aircraft. As a result, the liability associated with aircraft is excluded from the majority of general liability policies. Likewise, damage to the drone itself is generally excluded from property policies, leaving a potentially costly gap for your business.

If your business uses drones commercially, you need to know where your exposures lie and how to ensure you’re properly covered. Here are five key things you should know about drones and insurance.

1. Drones are Classified as Aircraft

First and foremost, it’s critical to understand that drones aren’t just toys—they’re classified as aircraft. This means there are legal obligations, especially when drones are used commercially. In Australia, for example, the Civil Aviation Safety Authority (CASA) governs drone use, and depending on the size and type of your drone, your business may need specific licensing and registration.

From Unmanned Aircraft Systems (UAS) to Remotely Piloted Aircraft Systems (RPAS), various terms refer to drones, but they all fall under similar legal definitions. Regardless of what you call your drone—UAV, SUA, or RPAS—you’ll need to ensure your business has the appropriate insurance.

Failing to meet regulatory requirements doesn’t just mean you could be fined, but it could also invalidate your insurance.

2. Most Liability Insurance Policies Will Not Provide Coverage for Damage or Injury

Here’s the hard truth: Most standard business liability policies won’t cover damages or injuries caused by drones. Since drones are classified as aircraft, any incidents involving them are typically excluded from general liability policies. The same applies to property policies—damage to the drone itself or to third-party property during a crash is usually not covered.

For example, if your real estate business uses a drone to capture aerial footage of a property, and that drone malfunctions and crashes into a neighbour’s house, your general liability policy won’t cover the damages. Without the right insurance, your business will have to cover the costs out of pocket.

In short, relying on your existing business insurance is a gamble. You need specialised coverage to protect yourself from the gaps in standard policies.

3. You May Require Specialised Cover to Minimise Your Risk

So, what can you do? The solution is specialised drone insurance. Aviation liability policies are designed to cover risks associated with operating drones, including damage to third-party property, injuries to people, and even damage to the drone itself (known as “hull” coverage).

Here are a few scenarios where specialised drone insurance would be essential:

• Damage or injury to third parties: If your drone crashes into a building or injures a bystander, aviation liability insurance can cover the costs.
• Drone damage or loss: If your drone loses control and crashes, hull insurance covers the damage or total loss of the drone.
• Injury to the drone crew: Injuries sustained by drone operators during a crash or while piloting the drone can also be covered under specialised policies.

Some general liability policies can be endorsed to extend to certain aviation risks, but it’s important to speak with your insurer to understand the scope of your coverage.

4. Engaging a Third-Party Contractor Also Carries Potential Risk

If your business uses third-party contractors to operate drones—like a real estate agent hiring a drone photographer—you still carry potential risk. Many business owners assume that subcontractors carry their own insurance, but relying on someone else’s coverage is risky.

Here’s why: 

• Lack of control: You don’t have control over the quality or scope of the insurance your contractor has in place.
• Not listed as a named insured: Unless you’re listed as a named insured on the contractor’s policy, you likely won’t be covered in the event of a claim.

For example, if a drone operator hired by a roofing company causes property damage or injures a bystander while surveying a roof, the roofing company could still be held responsible. It’s essential to ensure that your own insurance policy covers risks associated with contractors and subcontractors.

5. Possible Drone Exclusions To Be Aware Of

Even with the right policies in place, it’s critical to operate your drone within the bounds of the law and your insurance coverage. Many insurance policies include specific exclusions for drones. For instance, most general liability policies have exclusions like the following:

Aircraft, Hovercraft or Watercraft Exclusion
“We do not cover any liability arising out of, caused by or in connection with: Personal Injury and/or Property Damage arising from the ownership, maintenance, operation, or use by You of any Aircraft.”

What does this mean for you? If your drone causes damage or injury while operating outside of regulated guidelines or your insurance’s terms, your claim may be denied. For example, if you fail to register your drone with CASA or fly it in restricted airspace, your insurance provider may reject your claim for any damages caused during the incident.

Licensing & Regulation Resources

The following links provide additional information about commercial drone licensing and regulations:

• Rules for Commercial Drone Use in Australia – QBE
• Drone Rules – Civil Aviation Safety Authority
• Register Your Drone – Civil Aviation Safety Authority
• State and Territory Rules
• Local Drone Rules Map [Interactive Tool]

Speak With An Insurer

Drone technology is revolutionising how businesses operate, but it also brings unique risks that standard insurance policies often don’t cover. If you’re using drones in a commercial capacity, it’s critical to speak with an insurer who understands these risks and can help you obtain the proper coverage.

General liability policies often exclude aircraft, leaving you exposed to potentially significant financial risks. Don’t leave your business unprotected. Make sure your drone is registered with CASA and that you have the right insurance in place to cover any accidents, damages, or injuries that could arise.

Get in touch with us today, and we’ll work with you to find the specialised drone coverage your business needs to fly safely and securely.