A working group of insurance regulator IRDAI has highlighted the need to extend comprehensive insurance coverage for drones.

Such coverage, addressing the different risk profile, is necessary to ensure public confidence as the market for drones develops, the working group on ‘Remotely Piloted Aircraft System/Drone Technology’ said in its report.

The working group that went into different aspects of drones, across technology, operations, market and international practices, sought to differ with the draft Unmanned Aircraft System (UAS) Rules, 2020, notified by the Civil Aviation Ministry, on the issue of third-party compensation.

Noting that the draft rules suggest that the compensation should be on the lines of the Motor Vehicle Act, the working group said “this is not in line with international practices. Creating a solatium fund, similar to motor vehicles, for hit and fly / hit and crash drones is unthinkable as there is little opportunity for the drone insurance segment to generate such funds.”

Noting that international markets have considered insurance options for drones under aviation lines of business and not in the traditional lines of business, the report said it recommended third-party liability insurance to be in line with aircraft /aviation liability.

The report said drone insurance coverage can broadly be offered across three categories – physical damage/loss to the equipment due to various contingencies; Third Party liability resulting from the usage; and additional coverage such as invasion of privacy and noise liability.

On pricing, the working group said it has no intention to suggest a particular price and leaves the determination to each insurer’s appointed actuary.

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