Risk Managers’ Top Concern is Privacy When it Comes to Using Drones

When it comes to commercial drones usage, 61 percent of risk managers are concerned about the potential for invasion of privacy, according to a 2017 survey conducted by Munich Reinsurance America, Inc. (Munich Re, US) during the Risk Management Society Annual Conference held in Philadelphia, Penn. Other concerns include inadequate insurance (15 percent), personal injury (15 percent) and property damage (9 percent).

In August 2016, the Federal Aviation Administration (FAA) issued operational rules that would allow for commercial use of unmanned aircraft systems (UAS) or drones in U.S. airspace for operators who complete a certification process. The FAA anticipates commercial drones’ sales to reach 2.7 million by 2020.

“With the use of commercial drones soaring, it is revolutionizing how many companies conduct and grow their businesses,” said Gerry Finley, senior vice president, Casualty Underwriting, Munich Re, US. “Drones can be used by farmers to monitor fields for pest management, or by an energy company to monitor a solar panel ‘farm.’ We may even see drones deliver packages for an online retailer on a daily basis. As the use of drone technology continues to evolve, the insurance industry will need to be prepared with innovative products and services to help its customers understand and manage the emerging property and liability risks involved.”

The majority of the 100 risk managers surveyed (62 percent) expect commercial drone usage to become common practice for businesses in less than five years – a significant increase from the 37 percent who believed this in 2015. Eleven percent of respondents consider drone usage already a common practice. Since approval of the FAA’s new operational rules last year, one in two (46 percent) risk managers would consider or explore the use of drones within their own businesses, and 7 percent are already using drones to conduct business.

“New FAA regulations have encouraged the commercial use of drones across a broad spectrum of industries,” said Tim Brockett, senior vice president, Reinsurance Division, Munich Re, US, “and more companies and public entities are exploring new, safe and cost effective ways to use drone technology. However, they may be at risk since most commercial insurance policies don’t cover or offer very limited liability protection for drones. We recently launched a Drone Liability Endorsement to help address this emerging market need.”

Source: Munich Re, US