DRONES TAKE FLIGHT: KEY ISSUES FOR INSURANCE Lloyd’s new report
Lloyd’s new report - Drones Take Flight: Key issues for insurance - looks at the challenges around the development of insurance solutions for drones.
The drones sector is expanding rapidly with global expenditure on the emerging technology set to double to $91 billion over the next decade. Drones are now used for a range of activities including military, agriculture, public services, wildlife protection and research.
However, this study highlights a number of concerns around safety, security and surveillance that could pose significant risks to drone operators and manufacturers, and could hamper the sector’s growth.
The report identifies three key areas that must be developed for the effective provision of insurance for drone operations:
- Regulation, through the implementation of a robust, internationally-harmonious regulatory framework
- Safety, through the continued development of training and licensing schemes, and further enhancements in ‘sense and avoid’ technology
- Security, through the application of sufficient cyber security measures
Drone manufacturers must also be prepared to manage their increasing vulnerability to intellectual property and product liability risks.
The report concludes that drone manufacturers and users could face increasingly complex and high value risk exposures as the market continues to expand, and will need to work with regulators and insurers to ensure the technology is used safely and responsibly. By providing the support needed for the systems to operate safely and with due regard for third party interests, the insurance industry has the potential to act as an enabler for the successful adoption of this emerging technology.
Drones Take Flight is part of Lloyd’s Innovation Series of reports aimed at helping the insurance industry identify new and emerging risks, and the opportunities for new product development.