Drone Insurance- Part III
In continuation of Drones Insurance- Part-I & Part-II, we are presenting here Drones Insurance-Part-III as last part of this series.
On the Job Injury
Deployment of Drones certainly saves on the job Injuries in Hazardous situation while attending Surveys or Inspections. Safe Inspection without the involvement of the Human factor reduced on the job injury.
Use of Drones saving money in terms of less manpower involvement for inspecting the damage at the affected site. The insurer also reaps the savings on travel and lodging expenses of Surveyors.
Time is a key factor in settling any claim.
So deployment of Drones can produce results faster by representing facts, and manpower can make more to focus on settling claims while stationed at the office only.
Claim Managers can prioritize their responses in settling the claims rather than arranging resources.
Greater Customer Satisfaction
Save time in claim Settlement, and faster response on claims update leads to Customer Satisfaction at last, which is again the ultimate objective for any Insurer.
Greater customer satisfaction certainly reflects in the revenue impact of any Insurance company.
Disadvantages to Insurers
Cost of Setting up Drone survey
Presently, Drones usage in Insurance is in nascent age, so all this requires excess expense on the same. Technology is also expensive; Drone operators are not enough experienced to attend the situation with immediate deployment of Drones.
There are certain guidelines or licensing adherence,which is utmost required to fulfill before the usage of Drones commercially.
If it violates, then it again attracts more costs and punitive action.
Drones Advent in India
India Banned the use of civil Drone in 2014.
This Ban, after a Mumbai based ‘Pizzeria’ started to use Pizza delivery through Drones to its customers. In this, the Pizzeria with the use of Drones to air-drop pizzas.
Asteria Aerospace Pvt. Ltd., Bangaluru, was the first company to receive Drone Insurance for Beyond Visual Line of Sight (BVLOS) operations.
Basically, the Insurance is given by the state-owned General insurance company.
As all we know, for any sky operation or air traffic, the Director General of Civil Aviation(DGCA) is the approving authority.
So as to Drones Insurance was also specifically designed for Asteria Aerospace and was approved by the Director General of Civil Aviation(DGCA).
From that time, the company can now undertake its BLVOS drone test flight with drone insurance covering the 100 flight hours of testing to come.
Till date Director General of Civil Aviation(DGCA), they have already approved more than 20 companies to undertake BVLOS drone trials along with Asteria Aerospace.
These drone flights will be done in a sandbox environment.
Around 10 consortia, which also includes Reliance-backed Asteria Aerospace Pvt. Ltd., Nandan Nilekani’s backed ShopX, Spicejet, and Google’s backed Dunzo, among others who have been permitted by the Directorate General of Civil Aviation(DGCA), to carry out “beyond visual line of sight” (BVLOS) drone projects in pre-defined airspaces across the country.
In the Private Sector player, Tata AIG General Insurance company is also tied up with the Drone Federation of India(DFI)for Drone insurance.
The Drone Federation of India(DFI), which is a non-government , not-for-profit, industry-led body that promotes and strives towards building a safer and scalable unmanned aviation industry in India.
Also, note that the Director General of Civil Aviation(DGCA) makes it mandatory for Drone Insurance during the operation of remotely piloted aircraft (RPA) systems.
DRONES INSURANCE- PRESENT STATUS- IRDA’s Working Group
On 24th June 2020, India’s Insurance Regulatory Body, Insurance Development and Regulatory Authority(IRDA) formulated a Nine member Working Group(WG) headed by Mr. Anjan Dey, G.M., The New India Assurance Company Ltd. with below terms of reference (ToR):-
- Study and understand the Insurance needs of Remotely Piloted Aircraft System(RPAS)/ Drones Owners and Operators
- Seek recommendation on design and development of such products which will meet the need of RPAS owners and operators including Third Party Liability
- Working Group(WG) will make recommendations related to the Underwriting of such risks, including Reinsurance
- and, examine any other relevant matter relating to the subject
The Working Group had to submit its report within six weeks from the date of this order.
The other members of this panel were:-
- Arthi Mathur, G.M., Oriental Insurance Company (Member)
- Savio Fernandes, D.G.M., General Insurance Corporation of India (Member)
- S Vishwanathan, Commercial lines underwriting head, SBI General Insurance(Member)
- Diptanshookumar, Deputy Vice President, Tata AIG (Member)
- TA Ramalingam, C.T.O., Bajaj Allianz (Member)
- C Latha, IRDAI (Member)
- Mukesh Kewalramani, IRDAI (Member)
- Ajay Kumar, IRDAI (Convenor)
This Working Group had submitted its detailed report on 12th August 2020 with its recommendation on many aspects as per terms of Reference (TOF) of this WG.
This detail report can be read by clicking here.
This report provides details on suggested Drones Insurance cover and underwriting considerations, also an overview of Drone Insurance policy wordings under below heads
Section 1: Legal Liabilities To Third Party
Section 2: Drone Hull Cover
Section 3: Personal Accident Cover To Operator
Section 4: Accidental Medical Expenses Cover To Operator
General Exclusions Applicable To All Sections
- Alternate Hire Charges
- Drone War Liabilities
- Cyber Liability Cover
- Invasion Of Privacy Cover
- Night Flying Endorsement
- BVLOS Endorsement
- Drone In Transit Endorsement
- Liability For Damage To UAS That You Do Not Own
- Personal & Advertising Injury Liability
The Ministry of Civil Aviation has also notified the draft Unmanned Aircraft System (UAS) Rules, 2020, on 3rd June 2020.
In this, they mentioned under Section 52 the following recommendations:-
(1) Firstly, Third Party Insurance Policy mandatory for all UAV operated in India.
It requires to cover the liability that may arise on account of a mishap involving such UAV and causing death or bodily injury to any person or damage to property.
(2) Secondly, the compensation payable in such cases shall be assessed as per the procedure specified in the Motor Vehicles Act, 1988, and rules made thereunder.
With respect to risk coverage, the Working Group (WG) said, Drones Insurance coverage can be broken into the following three sets, i.e.,
- Physical damage/loss to Drone due to various contingencies;
- Arising of Third-party liability due to the usage of Drone and
- Additional covers (invasion of privacy, cyber loss of digital assets, and noise liability)
As the Group had submitted its report on 12 th August 2020, now by the time has started to more usage of Drones in most of the Industrial sector, and we can say the Growth of the Drones era now.
With the Growth of the Drones era now, there are also a growing number of numerous opportunities associated with all related Industrial and non-Industrial sectors of Drone Industries.
So, at last, we can say that the Legalization of Drones will certainly open doors to new opportunities and associated threats too, which requires immediate action of IRDA and DGCA timely to limit these threats.
There is also new Opportunities to all Insurance professionals for growing in Drones Insurance area by updating their skills with updates courses of CPCU and AINS. (check our page Insurance Education Globally).
This was the last Part of Drones Insurance series, but do visit here again some more Drones Insurance related updates in our upcoming posts.