Report: More Drones Means New Risks, Benefits

Recent AGCS report that companies may require $1 million in drone insurance
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NEW YORK—Following the FAA’s approval of drones, or UAS, for commercial use more and more people and companies are taking to the skies with them. Though as Allianz Global Corporate & Speciality (AGCS) indicates in its report, “Rise of the Drones: Managing the Unique Risks Associated with Unmanned Aircraft Systems,” there are benefits that go along with the increase use of drones, but also some new risks.

Top Five UAS Markets

The report says that the FAA predicts that more than 600,000 UAS will be deployed for commercial use by the end of 2016. Utilizing these systems allows for many companies to perform previously menial or dangerous tasks. For example, drones can be used for aerial inspections, which in the broadcast industry could greatly reduce the number of accidents that befall tower workers.

However, with the increased number of drones, which also includes an estimated 1.9 million for recreational use in 2016, mid-air collisions and loss of control are greater risks.

What all this means, according to AGCS’ report, is that more thought and more money may have to be invested in companies’ plans for utilizing UAS. AGCS stresses that consistent standards and regulations are required for safe operation, as well as proper training. “In many locations, there are few or no pilot training and maintenance standards,” said James Van Meter, aviation practice leader at AGCS. “In addition to regulation, education will continue to be key to ensuing safe UAS operations.”

All of this has led to a fast growing drone insurance industry, and according to AGCS, a majority of commercial UAS operators will require at least a $1 million policy to protect against risk exposure. AGCS forecasts that by 2020, the drone insurance industry could be worth more than $500 million in the U.S., and approach $1 billion globally.

To read the full AGCS report, click here.