Whether you are a UAS Operator or Manufacturer, this guide will assist you in understanding how insurance can help you in your business, which policies to prioritize, the potential costs, and how to get started, so you can get back to what really matters — flying. Trusted by thousands of businesses like yours, Henriott has the insurance experts, so you don’t have to be. To get started, visit our coverage page: Henriott UAS Insurance Application and apply for a tailored quote today.
1. What insurance do I need to run a drone business?
Any Unmanned Aerial System (UAS) owner / operator whose primary business address is in the United States will generally need the following Unmanned Aerial Systems Liability (UASL) & Hull Insurance:
- Unmanned Aerial System Liability (UASL): This policy covers third-party bodily injury and property damage resulting from your drone operations during flight. It also includes Non-Owned Drone Liability, so if you’re using rented or leased drones, you’re covered without needing a separate policy. This is essential for operations like aerial photography, surveying, and construction inspections. Endorsements can be added, including. The policy can also include Personal and Advertising Injury, which covers privacy liability. This coverage is particularly important for businesses in industries like aerial photography, real estate, event videography, and public surveillance, and you may be requested to carry this by your customers where privacy claims might arise from unauthorized recording or improper use of footage.
- Ground Operations Liability: Often included as part of the UASL policy, this covers incidents occurring while the drone is on the ground (e.g., during setup, maintenance, or transportation). If a drone damages property or causes injury during non-flight operations (e.g., a worker accidentally knocks over a drone), Ground Operations Liability responds to the claim. This is vital in environments like construction sites or surveying.
- Hull Insurance: Protects the drone itself from physical damage due to accidents, theft, or vandalism. This is essential for operators in industries like media production, geospatial mapping, or agriculture, where drones and onboard technology can be expensive. When financing a drone, your finance company will want proof that this coverage is in place. Endorsements can be added, including:
- Payload physical damage (cameras and most other external payloads)
- Ground Equipment physical damage (controllers, launchers etc.)
- Spare parts physical damage
- Non-owned physical damage, including accidental damage to rental or temporary drones or payload items
2. What insurance do financers or lessors of drones and UAV / UAS equipment require, and how can I provide proof of coverage?
Financers and lessors will typically require evidence of insurance, such as Unmanned Aerial System Liability (UASL) and Hull Insurance, before they approve the financing or leasing of drones and equipment. You will also need to provide a Certificate of Insurance (COI), which includes:
- Loss Payee Status: This designates the financer or lessor as a party who will receive compensation in case the insured equipment is damaged, stolen, or destroyed. It ensures that any claims related to damage to the drone or equipment will compensate the financer or lessor, up to their financial interest, before any proceeds go to you as the operator.
Henriott can help by:
- Providing a COI: Henriott will issue the COI that evidences the required coverages and properly lists the financer or lessor as a loss payee.
- Tailoring Coverage: Henriott’s team ensures that your policy complies with the financer or lessor’s requirements, so you can avoid delays in financing or leasing approvals.
- Purchasing Online: You can easily purchase the required insurance online by visiting our Henriott UAS Insurance Application and applying for a tailored quote today.
3. Can I purchase Unmanned Aerial Systems Liability & Hull Insurance for my drone or equipment online?
Yes, Henriott, is one of the leading insurance agencies and risk management consultants for drone and UAV operators, distributors, and manufacturers. ONE single online application experience makes it radically simple to get started. Several tailored insurance products can be quoted and purchased from your account after answering some questions about your drone and operations. To get started, visit our coverage page: Henriott UAS Insurance Application and apply for a tailored quote today.
4. What insurance do I need if I am a UAS manufacturer, user of drone services or have other insurance needs, e.g., employees, leased premises, etc.
If you are a manufacturer, user of drone services, have other insurance needs, or your drone fleet exceeds 10 systems please contact Rick Harpenau at info@henriott.com for further information on the most appropriate insurance products. Examples of coverages that may be needed by your business include:
- Product Liability Insurance: Protects against claims for bodily injury or property damage arising from defects or malfunctions in the drones or related equipment you manufacture or design. If a drone you manufacture causes injury or property damage due to a defect, Product Liability will cover legal costs and damages. This coverage is critical for drone manufacturers and UAV system designers to mitigate risks related to defective products.
- Errors & Omissions (E&O) Insurance (Professional Liability): Covers claims related to negligence, errors, or omissions in the design, manufacturing, or delivery of UAV systems. If a flaw in your design leads to operational failure, defective products, or legal claims, E&O Insurance covers defense costs and settlements. This is essential for UAV system designers, engineers, and manufacturers who provide professional services or advice.
- Business Owner’s Policy (BOP): A BOP bundles several important coverages into one policy for businesses, including:
- Commercial General Liability (CGL): For your non-Aviation Operations, covering third-party bodily injury and property damage unrelated to drone operations, e.g., bodily injury or property damage occurring on your business premises (e.g., HQ or storage).
- Commercial Property Insurance: Covers your business’s physical assets, such as office space and equipment.
- Business Interruption Insurance: Covers income loss if operations are interrupted due to a covered event (e.g., fire or storm damage).
- Hired and Non-Owned Auto Liability (HNA): Can also be included for vehicles used in your operations.
- Workers’ Compensation (WC): Required by law once you hire employees, WC covers medical expenses and lost wages for employees injured while working. This is crucial for growing drone businesses, especially in high-risk industries like construction or media production.
- Directors & Officers (D&O) Liability: Protects your leadership team from lawsuits related to mismanagement or fiduciary breaches. This is crucial for businesses that have a board of directors or are seeking investment.
- Fiduciary Liability: If your business offers employee benefits (e.g., health & retirement plans), Fiduciary Liability protects against claims related to mismanagement of those benefits.
- Employment Practices Liability Insurance (EPL): As your business grows and you hire employees, EPL insurance protects against claims related to wrongful termination, discrimination, harassment, and other employment-related issues.
- Umbrella/Excess Liability Insurance: Provides additional coverage beyond the limits of your underlying liability policies (e.g., UASL, BOP, or WC). This is recommended for businesses seeking extra protection in the event of catastrophic claims or lawsuits.
5. Is drone insurance required for commercial use?
While not legally required in all jurisdictions, Unmanned Aerial System Liability (UASL) and Ground Operations Liability are typically required by clients, property owners, or regulatory bodies before you can operate drones commercially. For businesses operating in industries like construction, surveying, or infrastructure inspections, proof of insurance (via a Certificate of Insurance) is usually mandatory before beginning any work.
6. How much does insurance cost for a drone business?
Aviation-Related Coverages:
- Unmanned Aerial System Liability (UASL) and Ground Operations Liability: Costs typically range from $600 to $3,500+ per year for coverage limits of $1 million to $2 million. Pricing depends on drone type, industry, location, and usage (e.g., hours of operation or gross revenue).
- Hull & Payload Insurance: For a drone or equipment valued at $10,000, premiums usually range from $300 to $600+ annually. Higher-value drones or equipment used in industries like media production, geospatial mapping, or agriculture may incur higher premiums.
- Errors & Omissions (E&O) Insurance (for Professional Services): For drone businesses offering professional services (e.g., aerial surveying, geospatial mapping), premiums range from $1,500 to $15,000+ annually, depending on the complexity of the risk and revenue generated from these services.
Non-Aviation-Related Coverages:
- Business Owner’s Policy (BOP): Premiums typically range from $500 to $3,500+ annually for small to mid-sized businesses, depending on your revenue, location, property insured, etc.
- Workers’ Compensation (WC): Premiums per employee depend on payroll, job classification, and the level of risk associated with the industry.
- Directors & Officers (D&O) and Fiduciary Liability: Varies depending on the size of the business and the level of coverage required to protect leadership from lawsuits related to mismanagement or fiduciary breaches.
- Employment Practices Liability Insurance (EPL):Varies depending on the number of employees and payroll.
- Product Liability Insurance: Premiums vary depending on the volume of sales, complexity of the product, and potential risks involved.
- Cyber Liability Insurance: Premiums vary depending on the volume of sensitive data handled by the business.
Note: Your specific premium will vary based on the size, location, and nature of your operations.
7. What does liability insurance cover in a drone business?
- Bodily Injury: Coverage for third-party injuries caused by your drone operations, whether during flight (UASL) or on the ground (Ground Operations Liability). This is essential for industries like construction, where accidents may occur on active job sites.
- Property Damage: Covers third-party property damage caused by your drone operations. This is particularly important in industries such as surveying, infrastructure inspections, or media production, where drones are used around valuable structures.
- Personal and Advertising Injury: Covers torts like wrongful entry and privacy liability. This coverage is particularly important for businesses in industries like aerial photography, real estate, event videography, and public surveillance
- Premises Liability (under a BOP): Covers third-party claims for bodily injury or property damage on your leased premises (e.g., HQ or storage facility) or for non-aviation operations.
- Product Liability (under a PL policy): Covers bodily injury or property damage caused by a defective drone or related equipment that you manufacture or sell.
8. Will insurance cover my drone if it crashes during a job?
Yes, Hull Insurance will pay for damage to the drone itself from covered accidents, crashes, or theft. This includes repairs or replacement of the drone if necessary. It’s essential for businesses in industries like media production or geospatial mapping, where drone downtime can significantly impact operations.
9. Can I insure my drone equipment, like cameras or sensors?
Yes, Payload Insurance covers damage or loss to equipment attached to your drone, such as cameras, sensors, or other tools. This is crucial for businesses in agriculture, media production, or surveying, where such equipment may represent a significant investment. This coverage can often be endorsed to your Hull Insurance. Endorsements that can be added, include:
- Payload physical damage (cameras and most other external payloads)
- Ground Equipment physical damage (controllers, launchers etc.)
- Spare parts physical damage
- Non-owned physical damage, including accidental damage to rental or temporary drones or payload items
10. What happens if my drone causes damage to property or people?
If your drone causes property damage or bodily injury, Unmanned Aerial System Liability (UASL) will cover third-party claims. These policies protect you from having to pay out-of-pocket for damages or legal defense. For example, if a drone crashes into a building during a construction inspection or injures someone at a public event, your liability insurance will handle the resulting costs, including your legal defense.
If the damage or injury is caused by a defect in the drone or equipment that your company manufactured, Product Liability Insurance will cover the claim.
11. How can I lower insurance costs for my drone business?
Managing costs effectively while maintaining adequate coverage is crucial for drone operators. Here’s how you can reduce premiums while staying compliant with FAA regulations:
- Improve Safety Practices: Conducting Operational Risk Assessments (ORAs) is a powerful way to identify, analyze, and mitigate risks. ORAs help demonstrate a proactive safety culture and can support insurance underwriters when assessing your risk, potentially reducing premiums. ORAs also show compliance with FAA regulations like maintaining visual line of sight (LOS) and preventing mid-air collisions. Additionally, maintaining compliance with Part 107 and passing the aeronautical knowledge test is critical for safe operations (14 CFR Part 107.31, 107.63).
- Stay Current with FAA Regulations: Keep up with FAA drone regulations, including Part 107. Staying compliant can help avoid fines and improve your insurability. Regular updates to your ORAs and compliance records ensure that your insurance provider sees you as a low-risk operator.
- Complete Pilot Training: Ensure all drone operators are certified under Part 107 of the Federal Aviation Regulations (14 CFR Part 107). Insurers often offer lower rates for trained and certified pilots, as this demonstrates reduced risk for incidents or accidents.
- Maintain a Clean Record: Operating without incidents or claims helps reduce future premiums. Insurers reward businesses with a track record of safe operations.
- Increase Deductibles: Opting for higher deductibles can lower premiums, but it also increases the financial burden if you need to make a claim.
- Leverage Your ORA with Your Insurance Provider: ORAs can demonstrate that you’ve thoroughly evaluated risks and are following best practices to mitigate them. Insurance companies may offer better rates for businesses that show a commitment to safety and FAA compliance through detailed ORAs.
12. Does drone insurance cover privacy issues or data breaches?
Cyber Liability Insurance and Personal & Advertising Injury Liability Insurance address different but often related concerns for drone businesses, especially those handling sensitive data or capturing footage in public or private spaces.
- Cyber Liability Insurance: Covers data breaches and loss of personal or sensitive information from cyberattacks that compromise your systems or data collected by drones, including the costs associated with breach notifications, forensic investigations, and legal defense.
- Personal & Advertising Injury Liability Insurance: While Cyber Liability Insurance handles data-related breaches, Personal & Advertising Injury Liability Insurance protects against claims related to invasion of privacy due to unauthorized video recording or image capture, unauthorized use of footage for marketing or advertising purposes, defamation or misrepresentation resulting from captured content, as well as legal fees and settlements for privacy violations. Coverage is typically provided under your Unmanned Aerial System Liability policy. However, this can vary depending on your operations and you may need to endorse your policy for additional limits of liability depending on your specific circumstances.
13. Do I need different insurance for different types of drone services?
Yes, depending on the service provided, your insurance needs may vary:
- Aerial Photography/Videography: May only require basic liability and equipment coverage.
- Surveying/Geospatial Mapping: Customers may require Professional Liability (Errors & Omissions) to protect against claims related to incorrect data or faulty reports.
- Construction/Infrastructure Inspections: Customers may require higher liability limits, hull insurance, and ground operations liability due to the increased risks of operating drones around construction sites or valuable infrastructure.
- Manufacturing/Designing UAV Systems: Customers may require Product Liability Insurance and/or Errors & Omissions (E&O) to cover claims related to defective products or professional services.
- Aerial Photography/Real Estate/Event Coverage/Public Surveillance: Should confirm their Unmanned Aerial System Liability policy includes adequate Personal and Advertising Injury Liability Insurance, including Privacy Liability
For more information about Henriott Group, visit www.henriott.com.
CONTACT: Rick Harpenau | Phone 800-675-7901| info@henriott.com
This document provides only a brief summary description and general information about various types of insurance and is not intended as legal advice. For personalized assistance, consult with a licensed insurance agent at Henriott to ensure you have the right coverage for your specific needs.
About Henriott Group
Henriott is an independent Risk Management firm dedicated to helping clients prevent, manage, and recover from critical incidents. We serve both public and private entities, offering expertise in risk management, risk financing, commercial insurance, employee benefits, crisis management, contingency planning, and crisis response.
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Grace Pritchett, Communications (765) 838-8610 | gpritchett@henriott.com
