Drone insurance is taking off. What does the policy cover?

According to the firm, the ‘New India Unmanned Aircraft System (UAS/ UAV/ RPAS/ Drone) Insurance’ will cover large aircraft to solo flying gliders. Coverage will be offered to drone owners, operators, and manufacturers.

“The product provides a diverse option of over 15 different add-on covers for customers to pick and choose from. These add-on covers are designed as per the drone industry’s requirements. The policy covers physical damage to the aircraft and its theft. It also provides cover for accidental physical injury to the third party and/or damage to their property due to the aircraft’s operations,” New India said.

What is covered under drone insurance?

The policy is designed to cover fixed wing, rotor wing and hybrid UAS that can be controlled remotely (with pilot intervention) or autonomous drones (without pilot intervention). These aircraft are generally deployed for military and non-military applications, including surveillance, geography and infrastructure inspections and aerial photography, New India said.

The insurance protection offered for the damage to the drone and payload it carries will provide coverage for the replacement or repair, accidental loss of or damage to the UAS arising from the risks covered, including disappearance if the UAS is unreported after the commencement of Flight.

Third-party liability coverage will cover legal liabilities like bodily damage or property damage claims to third parties arising out of the usage and operation of drones, Bajaj Allianz said.

How big is the drone market in India?

A recent EY – FICCI report, ‘Making India the drone hub of the world,’ indicated that drones and allied component industries can boost India’s manufacturing potential by approximately $23 billion by 2030. The report emphasised the need for innovative and competitive manufacturing capabilities and a strong action plan to help India become a global hub for drone manufacturing by 2030.

It also highlighted the importance of generating a strong demand, increasing manufacturing, drawing investments and facilitating exports.

Neerja Kapur, Chairman and Managing Director, New India, said, “India’s drone manufacturing industry clocked annual sales of Rs 60 crore in FY 2021 and is expected to grow to Rs 900 crore by FY 2024.”

What are the regulations in the sector?

The Director General of Civil Aviation (DGCA) initially offered coverage to drones within a visual line of sight (VLOS) and during the day. However, the regulator changed the guidelines to offer coverage beyond VLOS. Insurance regulator IRDAI asked insurers to offer drone insurance coverage in February 2021.

Globally, drones are classified as ‘aircraft’ and aviation regulators have stepped in to regulate the sector. The Government of India has brought in policies (Drone Policy 1.0, 2018 and Drone Policy 2.0, 2019) which nudged the DGCA to come out with Regulations – Civil Aviation Regulation CAR 1.0, 2018 and recently, Draft Unmanned Aerial Vehicle Systems, 2020.