Is Insurance necessary for all commercial activities?

[DamienC]

In considering commercial drone work, I've often wondered if liability insurance is always necessary. Obviously if a client requires it, then it's a no brainer. But I've heard that some jobs have a lower risk of damage to people or property, such as mapping a wide-open field. I'm planning to do whatever work I can find that is low-risk, and after generating some business, then go for the expensive insurance, then the job that require it (which also might require a parachute system!) Any opinions on this? Do many of you out there carry insurance from the get-go?

 

[The Editor]

In considering commercial drone work, I've often wondered if liability insurance is always necessary. Obviously if a client requires it, then it's a no brainer. But I've heard that some jobs have a lower risk of damage to people or property, such as mapping a wide-open field. I'm planning to do whatever work I can find that is low-risk, and after generating some business, then go for the expensive insurance, then the job that require it (which also might require a parachute system!) Any opinions on this? Do many of you out there carry insurance from the get-go?

Depends on what country.
Sensibly, most countries have a mandatory requirement for liability cover if undertaking commercial activities.
This is either by way of self declaration or copies of certificates being lodged with that countries Aviation Authority as an addendum to an ops manual.

 

[Mavic Mac]

You may also want to post your question in the sister forum

 

[MAvic_South_Oz]

In considering commercial drone work, I've often wondered if liability insurance is always necessary. Obviously if a client requires it, then it's a no brainer. But I've heard that some jobs have a lower risk of damage to people or property, such as mapping a wide-open field. I'm planning to do whatever work I can find that is low-risk, and after generating some business, then go for the expensive insurance, then the job that require it (which also might require a parachute system!) Any opinions on this? Do many of you out there carry insurance from the get-go?

I don't have a drone related biz, but have been in biz for some 20+ years.
Always carried PL (public liability) insurance, have never had to use it.

You're in the US, so yes it'd be a almost mandatory to have it, not just for possible client requirements, but for your own protection.
Any business in developed western countries should have it, the litigious nature of society now makes it a notch above prudent.

Use it as a selling tool, have it in black and white or explain to clients you have cover for any mishaps, no matter how unlikely they are to occur.
Develop good flight procedures and risk mitigation, you will probably never need it, but drones can and do often not act 100% as they should, we all know that too.

 

[old man mavic]

even if you are only flying for recreational purposes it is advisable to have third party cover ,for that moment when your drone falls from the sky and causes damage to persons or property,
although we all hope it will never happen ,no matter how much we take care of our drones the unexpected is always just around the corner

 

[BigAl07]

Some clients require a certain $$ amount of insurance but any smart business person would not consider flying for a moment without some degree of coverage. In today's society everyone is "Sue Happy" and if you add a buzz word (let's say DRONE) they will try and make an example out of you.

Our "normal" coverage is $1M but if we have a client needing more we just increase it for that period of time and pay additional fees (added to our fees).

For a few $$'s a month you'd be foolish to jeopardize your company and personal finances to fly without it.

 

[MAvic_South_Oz]

Our "normal" coverage is $1M

Not a lot when you think most normal ground based biz here in OZ have had PL cover in the range of $5 million for many years, and for some more recent several years, events we've gone to require us to have $10 million !!

I suppose drone biz is very much site / location based, and the worst case is a drone falling without control, but I would have thought $1 million would not be enough in general for such an activity.
It would help keep costs down with relative premiums though, and some cover is better than none.

 

[BigAl07]

Not a lot when you think most normal ground based biz here in OZ have had PL cover in the range of $5 million for many years, and for some more recent several years, events we've gone to require us to have $10 million !!

I suppose drone biz is very much site / location based, and the worst case is a drone falling without control, but I would have thought $1 million would not be enough in general for such an activity.
It would help keep costs down with relative premiums though, and some cover is better than none.

The majority of our clients only ask "Are you insured" and don't stipulate a min. A few clients require $500K. We did one shoot for a Gov agency over a large electrical dam that services millions of customers with power. They required $10M and we got ours bumped up to cover it for 2-days and the cost was STEEP. Ironically that same Gov agency created their own UAS program about a year after that and I know their UAS policy is only $1M lol.

For 99.9% of our needs $1M is more than enough at least for now.

 

[HumbearKS]

Damien, you might also want to consider ad-hoc insurance for specific flights only as offered by Verifly: Drone Liability Insurance by the Hour | Thimble | Thimble

 

[DamienC]

Thanks for the replies, everybody. I guess the question sort of answered itself in that any business worth it's salt will want to protect itself considering Murphy's Law, and our litigious society. Makes sense to have it to protect myself....

Coulda had a V8.....

 

[scoble08]

Damien, you might also want to consider ad-hoc insurance for specific flights only as offered by Verifly: Drone Liability Insurance by the Hour | Thimble | Thimble

Verifly app. Do it onsite per flight.

 

[Deleted member 114292]

The answer is no.