QBE launches dedicated drone cover

Australia’s rapidly expanding drone market, combined with Remotely Piloted Aircraft Systems (RPAS) industry consultation, has seen QBE Insurance launch a new dedicated drone insurance policy.

The policy has been created by underwriters and product specialists with risks that are specific to drones (also known as Remotely Piloted Aircraft Systems or RPA devices) in mind. The new policy exists as a stand-alone product from QBE’s current aviation policies, providing cover not previously available in the market and written using industry language.

In conjunction with the policy launch, QBE Insurance’s Aviation team has released a report, Drones and Insurance: The Sky is the Limit, highlighting some of the risks many owners and operators face. One of the risks discussed in the report includes how one in 50 drones crash, which means if an operator is not adequately covered it leaves them open to the loss of valuable assets, or potentially huge financial losses for any damage or injuries that may arise from an incident.

According to the report, there are now more than 1200 commercial operators in Australia who hold a Remote Operator’s Certificate (ReOC) and 7,000 individuals or companies providing RPAS services under the ‘excluded category’. The excluded category captures any RPA device that is under 2kg and flown for commercial reasons. The report also mentions that the global drone technology industry is forecast to be worth $US127 billion by 2020.

In July 2016 the Civil Aviation Safety Authority (CASA) introduced some regulatory exemptions for small commercial drone use, introducing the under two kilograms category that does not require a remote pilot’s license to operate. But CASA stresses that ‘commercial usage’ isn’t restricted to professional drone operators and that the exemption does not remove an operator’s responsibility to comply with the standard operating conditions.

QBE Australia and New Zealand Operations (ANZO) Manager – Underwriting and Distribution Michael McNamara, said ‘commercial usage’ can extend to any drone flown for a purpose other than sport or recreation.

“A tradesperson may use a drone to conduct a roof inspection. In this instance, the drone would be considered a commercial operation, even though it’s not being used to sell the tradesperson’s service,” he said.

The relaxed CASA regulation means drones are being adopted by a wide range of industries, with some new sectors emerging as growth areas – drones are rapidly disrupting major industries from agriculture and construction to real estate and photography.

QBE’s report indicates the most common commercial use of drones by Australian businesses are for aerial photography, inspection and surveying, with a strong emergence of drone operators contracting their services in the resources and energy sector.

Mr McNamara said that he is seeing drones being increasingly used to conduct asset inspection work on properties, roofs, chimneys, power lines, pipelines, railways and bridges, and to do project management work.

“We’re also seeing Australian farmers investing in entry-level RPAS units to conduct crop monitoring, aerial spraying, irrigation and soil and field analysis,” he said.

“The exemption in the CASA regulations has resulted in greater accessibility for commercial drone operators, and there is a risk that some operators without aviation experience do not understand the regulations and legislation they operate under.”

QBE’s report highlights that one of the greatest risks for drone owners and operators is in liability to third parties.

If a drone being used for commercial purposes causes bodily injury or property damage, the owner/operator may be subject to strict liability. Strict liability means there’s no requirement for a third party to prove fault or negligence against the party that caused damage or injury This means that an owner/operator who is involved in an accident is at higher risk of huge financial loss.

Mr McNamara said that risk exposure for owners/operators also extends to transporting the devices and protecting their electronic data.

“This new policy has specifically been designed to address all risks and is backed by QBE’s approach to safety and airmanship,” he said.

QBE ANZO Executive General Manager, Intermediary Distribution Jason Clarke said QBE champions airmanship amongst our customers and partners, and is committed to providing responsible insurance by imbedding risk mitigation into our policies.

“As a leading aviation insurer we’re in a unique position to understand risks and promote a mitigation culture. We work with brokers and customers to help ensure they have adequate training and risk mitigation strategies in place to encourage safe operating practices and to improve our position for paying claims.”

An Australian Senate inquiry is currently reviewing the use and safety implications of drones. Some of the initial regulatory suggestions from this inquiry include safety awareness and training, registration and tracking and aviation safety. Further recommendations will be announced in March. QBE will remain alert to these recommendations and are committed to help keep customers informed of any implications that may result.

For further information please contact:
Erica Tarlington
External Communications Specialist - QBE Corporate Communications
Phone: +61 466 028 302
Email: erica.tarlington@qbe.com