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What is unmanned aircraft insurance?

What is Unmanned Aircraft Insurance?

May 7, 2023


Technology is advancing, and doing so in such a way that makes our everyday lives – and the ways we run our businesses – easier. Enter the term unmanned aircraft, also known as drones. You have probably seen them in people’s personal lives, where drones are used to film from bird’s eye perspectives or even employed for simple recreational usage. Drones, however, are also commonly used in businesses.

Commercial drones are used to map terrain, perform stockpile estimation, do security and surveillance, inspect assets, and study the land. Drone technology is also used heavily in agricultural operations. It is also used in the commercial drone market which is heavily in the way of agriculture.

But, like any asset on your farm, your drones for farming need insurance. Enter commercial drone insurance: a unique insurance package designed to cover unmanned aircraft. Here’s how that works.

What is an agricultural drone?

An agricultural drone is a type of unmanned aircraft that is used throughout farming operations, particularly in the optimization of yield as well as the monitoring of crop production and growth. Smarter agricultural drones with AI software may be employed to provide information on crop health, crop growth status, and more. Agricultural drones can even offer information on soil variations.

Drones are used in all aspects of business, but agricultural drones have become widespread in the farming industry. However, due to the risks they pose, the Federal Aviation Administration (FAA) needed to publish rules for commercial drone operations – including for farms.

Federal Aviation Administration Drone Regulations

The Federal Aviation Administration, or FAA, encouraged farmers to utilize drone technology in order to monitor the health of their fields. However, at the same time, there was a huge boom in the deployment and usage of agricultural drones. So the FAA retracted their encouragement, instead saying they would implement new rules and regulations. This was the result of incidents where drones were crashing into farming equipment and generally causing havoc due to lack of regulations and strict monitoring of their usage. So, in combination with the American Farm Bureau Federation, discussions then began to agree on stricter regulations. Which would encourage drone usage, but in a manner that was both safe and efficient. As such, 2016 saw the publication of FAA’s rules for commercial drone operations. These rules mandated that commercial drone operations must register their aircraft, pass a knowledge exam, and fly in compliance with the restrictions that had been published.

What is unmanned aircraft insurance?

Unmanned aircraft insurance, or commercial drone insurance, is a specific policy that protects commercial drone operations from third-party liabilities, including bodily injury and property damage. It also includes coverage protection if your drone or drone(s) are ever damaged or stolen.

The most important thing to note with standard commercial liability insurance policies is that drone usage is excluded, so you would need to obtain additional drone insurance coverage.

Eligibility information for insuring your drones for farming may have you answer the following questions:

  • Does your drone ever fly higher than 400 feet?
  • is your drone homemade?
  • Is your drone ever used off of the farm?
  • Is the drone used for crop spraying?
  • Does the drone ever fly over people?
  • Does the drone ever fly faster than 100mph
  • Does the drone ever fly at night?
  • Is the drone flown line of sight only?
  • Is the drone ever flown within five miles of a nearby airport available for public use?
  • Is the drone ever used for anything other than agricultural operations?
  • Is the drone being operated from a moving vehicle?
  • Have you (the farmer) passed an initial aeronautical knowledge test?

Coverage for your drones for farming may also vary based on the model and manufacturer of the drone, the year it was made, its weight, and total insured value. General information, like its maximum wind speed, range in height and miles, and if it has a “return to home” feature will be included as well.

Your commercial drone insurance’s drone liability insurance component may not cover you if the unmanned aircraft is used for recreational use or for hobby. It may also not include mechanical or electrical breakdown, wear and tear, freezing, mold, repairs/readjustment, or any fraudulent, dishonest, or criminal acts. Your commercial drone liability insurance portion is strictly for unexpected events causing bodily injury or property damage to third parties.

Your standard commercial drone insurance package will vary in cost and be built based on the type of business you run. Packages for commercial drone insurance may start at around $500 per year with a $1,000,000 coverage limit, but can run much higher depending on your risk and needs.

Insuring your drones for farming with Hitchings Insurance

Insuring your commercial drone is a great way to protect your assets for your farm against potential risks. Commercial drone insurance for farm drones that fly over fields and property to perform a variety of agricultural tasks may help to transfer risk over to your insurance provider. We highly advise insuring any drones that you use in your daily operations. This will help to avoid any unexpected third-party risks or unforeseen events, which could detriment your business operations and risk significant financial losses.

There are an increasing number of businesses using drones nowadays, including farming operations. Drones have specific regulations so as not to cause injury to others or to wildlife, but sometimes things happen. It’s better to be insured if they do. Give us a call here at Hitchings Insurance to discuss covering your drones for farming, as well as getting the right unmanned aircraft insurance for your farm.