Drones boom 'puts insurers at risk of multi-million bill'

Last week, the Civil Aviation Authority said it had recorded seven incidents between May 2014 and March 2015 at airports around the UK in which drones almost collided with planes

A drone for aerial photography (Getty)

The rise of drone technology could leave manufacturers and operators of the unmanned aerial vehicles facing multi-million pound claims, insurance experts have warned.

The number of drones flying in British airspace has soared in recent years with police forces, defence contractors and media firms among those authorised to operate them.

Earlier this year, Amazon’s founder Jeff Bezos unveiled plans for Amazon Prime Air, which could see the internet giant use drones to deliver small packages.

“Within the next 10 to 15 years, drones could replace cranes on construction sites and monitor traffic jams on public highways, which means new risks for aviation underwriters,” said Thomas Kriesmann, a senior underwriter at AGCS.

“We see the potential for multimillion-pound claims. We get the impression that the majority of manufacturers are not covered in the way we think they should be and we see complex liability scenarios that could involve manufacturers and service providers.”

Last week, the Civil Aviation Authority said it had recorded seven incidents between May 2014 and March 2015 at airports around the UK in which drones almost collided with planes. The CAA has launched a “dronecode” to alert users to the danger of collisions and accidents. Last week a drone flew within 100 metres of a Lufthansa flight approaching Warsaw airport.

Kieran Walshe, a partner at the law firm DWF, said: “Drones are becoming one of the biggest risks for insurers, but also one of the most significant product development areas due to the rapidly expanding usage by companies, as well as the public. The laws and liabilities involved range from aviation to privacy issues, but also trespass, harassment and data protection, with many drones carrying digital cameras. Criminal prosecutions can and will increase.

“At present, both insurers and drone operators are in uncharted waters. Amazon recently announced that it sells 10,000 drones a month, and the industry is worth over $1bn in manufacturing terms – it’s obvious that the technology is going to expand.”

With the use of commercial drones booming, the European Union is working on new regulations for them, due in the autumn.