The use of unmanned aircraft systems (UAS), or drones, has increased dramatically in the past few years. As drone use is projected to continually increase, businesses and insurers are weighing the benefits and risks associated with this emerging technology.
Drones offer employers tremendous advantages, in part by keeping employees away from hazardous environments. Consider, for instance, the benefits of flying a drone up over the roof of a building while the building inspector checks the video footage in real time for structural damage from the safety of an office.
In one sense, drones present the same insurance needs as other aircraft, though on a smaller scale. If a drone should crash, its owner would likely be liable for any property it damaged, any injuries caused by the crash and the loss of property itself (i.e., the drone and any cargo it might have been carrying). Currently, there aren’t an abundance of carriers offering coverage for aircraft, but as the Federal Aviation Administration (FAA) solidifies regulations on commercial drones, the number of insurers offering this coverage is likely to expand.
Still, drone technology has outpaced regulations. Currently, it’s unclear whether or not a drone can “trespass” onto private property by occupying the airspace above it. It’s also unclear whether any information gathered during a drone’s flight—for example, aerial photographs of a property—would constitute an invasion of privacy. Without clear laws or regulations to settle these questions, litigation remains a risk that companies must consider.
Finally, given the amount of data that UASs use, gather and catalog in the course of regular operations, companies need to consider the cyber risks posed by drones. Even though the nightmare scenario of a hacker hijacking a drone and flying it into a conventional commercial aircraft is rare, other cyber risks remain. Malware might simply corrupt the software used to communicate between pilot and aircraft, resulting in a loss of control. Alternatively, a criminal might merely be interested in hacking customer data like names and addresses from the aircraft.