Businesses at risk under new drone regulations

• New CASA regulations come into effect today
• Businesses will be liable for any costs for injury or damage
• Regular business insurance policies may not provide cover for drones

Australian businesses could be up for millions of dollars for property damage and injury, when new drone regulations come into effect today, according to insurer QBE.

Civil Aviation Safety Authority (CASA) is relaxing its regulations around drones, or remotely piloted aircraft (RPA), from this week, allowing small RPAs to be used for commercial purposes with less red tape.

Previously, commercial usage – which doesn’t necessarily require a monetary benefit – required operators to hold both a Remote Operators Certificate (ReOC) and a Remote Pilot Licence. The new regulations only require operators to register with CASA five days in advance and adhere to existing safety rules.

QBE, Australia’s largest aviation insurer, provides coverage for more than half of the RPAs currently being used commercially in the country and insures RPAs being used across a wide range of applications including; real estate, property, agribusiness, events and marketing, sporting bodies and film and television.

Simon Hooper, specialist aviation underwriter at QBE – and Australia’s first RPA underwriter – said the move presented an exciting opportunity for businesses across the country, but warned that most businesses weren’t aware of the implications should something go awry.

"We’re expecting to see a steep rise in the number of RPAs in use as businesses realise the potential of using them, but there is a worrying lack of understanding that there are still major risks associated with drones," Hooper said.

Should something go wrong, Hooper said that strict liability would be imposed, meaning operators can be personally held responsible for any injury or damage caused, irrespective of whether there is negligence or intent.

"Given many operators won’t have had extensive training, if any, this presents a genuine risk, which could leave operators exposed. The cost associated with an injury or property damage could go into the millions – in the worst case, they could lose everything.

"This type of cover typically won’t fall under standard business policies, so we’d advise them to ask their broker to ensure they have a specialist policy."

"In less serious incidents, it can still prove costly to repair damage caused to the aircraft itself, or caused by any accidents. We’ve already seen a number of incidents amongst our existing customers where poor flight planning has resulted in collisions with trees, buildings or even birds.

"So whilst the relaxing of regulations will make RPAs more accessible, we’d urge operators to ensure they have adequate protection."

QBE will insure operators who have membership of an RPAs industry association and hold a ReOC or have completed training by a registered training organisation.

Lee Carseldine, chief pilot of Droneit, said hobbyists thinking they could simply start using their small drones in the workplace, should be aware of the risks.

"While the new rules and regulations might be exciting for all drone users especially for hobbyists who can use commercially now, you need to define how you want to use them," Carseldine said.

"Small activity is obviously lower risk, but for anything external then it’s highly recommended you get covered."

"Trust me, when it comes to drones they are fickle machines and gravity does not discriminate. Two kilos might seem small, but they can still do a lot of damage."

"The reason we came to QBE was that we’re all about safety and so we wanted to be with the leaders in the field and benefit from knowledge-sharing amongst other operators in the sector."

Marcus Tehan, CEO and Founder of C3X, one of Australia’s leading aerial imagery, drone technology and solution companies, said they require a genuine business partner when looking for an insurer.

"We wanted someone we could trust and who had a strong background in the aviation sector, but for us to succeed we need to collaborate and have great partners," Mr Tehan said.

"QBE fell into that category for us – someone to be there at every step, who aligned with our core values and could help us grow in Australia and beyond."

"Our clients trust that we are managing risk and safety whilst still delivering the best standards. We needed an insurance partner who understands that and works proactively with us to get the best outcomes."

"We work in really complex environments and we need partners who can help us manage that risk, not just in aviation."

Businesses unsure about what’s changing and how they can protect themselves should read QBE’s guide or contact their broker.

For further information please contact:
Kate Sinclair
Senior Communications Specialist
QBE Corporate Communications
Phone: 02 9375 4882
Email: kate.sinclair@qbe.com