Drones - a help or a hindrance for the claims market? | Risk info | Large | Business | Zurich Insurance

Drones - a help or a hindrance for the claims market? How will regulations affect their use?


Drones (or “unmanned aircraft systems”) have notoriously been used for military purposes, but there are numerous future growth areas. Many dangerous jobs have been earmarked as those which may benefit from drone technology, including search and rescue, public security and firefighting.

In addition, commercial uses include filming panoramic TV shots, and deliveries (e.g. Amazon). AIG (in addition to a number of other insurers) has been given permission to begin trialling the use of drones in the USA to assist in the investigation of claims (particularly in locations which would ordinarily be too dangerous or inaccessible). Private and leisure use of drones has become increasingly popular, with drones already identified as the Christmas ‘must-have’ present. Lightweight drones are now very affordable. Effective and consistent regulation is required in order for drone use to become safe and commercially viable. Current regulations require drones to be within the line of sight of the operator at all times, which significantly restricts their current deployment. The European Commission currently envisages full integration of drones into European airspace by 2028, and has established a road map towards consistent regulation across the EU.

Risks associated with drones can be divided into two broad categories. Firstly, manufacturers and suppliers of drones will require product liability cover in respect of product and technological failures, to insure against accidents caused by defects within the drone itself, or the failure of supporting safety technology on which the drone relies. Secondly, owners and operators of drones will require liability insurance which will be modelled around existing aviation policies, and is likely to be the subject of compulsory insurance. Cover will be required in respect of incidents which result in injury or property damage, in addition to other potential risks such as invasion of privacy and data protection concerns.

Three examples of potential claims are:

  • Product failure – e.g. a failure in the drone’s electrical system, causing it to crash, leading to associated property damage and/or injury.

  • User error – e.g. an error by the user operating the drone such that it collides with another airborne entity, causing it to crash, with associated property damage and/or injury.

  • Communication failure – e.g. a failure in the on-board technology relating to the command and control link between the drone and the user, such that the drone flies out of the user’s control, or a failure of detect and avoid technology causing it to crash, with associated property damage and/or injury.

2 http://pennlawreview.com/online/162-U-Pa-L-Rev-Online-35.pdf

3 The designer's website is here

4 See e.g. http://www.ted.com/talks/skylar_tibbits_the_emergence_of_4d_printing