Drone Insurance: Essential Coverage for the Entertainment Industry

From feature films to advertising, drone technology has opened new creative possibilities, while also reducing risk, liability, and expense.

To be sure, helicopters remain the craft of choice for:

• High-altitude photography
• Situations requiring high speed
• Air-to-air scenes (such as filming combat between aircraft)
• Projects using heavy cameras

For nearly everything else, though, production companies prefer drones where viable. Helicopters can cost up to $5,000 per hour, while professional drone operations typically range from $200 to $500 per hour. The cost savings mean you can invest more in filming locations or equipment to enhance quality. And the reduced logistical complexity can streamline the production process.

When you use drones for filming, what insurance and risk management issues do you need to plan for?

Risk management for commercial drones

As with helicopters, drone use requires careful safety planning and precautions.

Imagine: A drone battery experiences thermal runaway during flight. Debris rains down, catching a barn on fire and burning it to the ground. Or perhaps you’re filming an event, and a smoke cannon obscures the drone’s line of sight, causing it to crash into the audience.

Drones can spark wildfires, burn homes, hit pedestrians, and more. So, it’s vital to develop risk management plans to prevent or mitigate risks of:

• Property damage or bodily injury: Map the drone’s proposed path of travel to identify potential hazards, improve lines of sight, and formulate accident prevention strategies.
• Battery failures: Follow the manufacturer’s care instructions for lithium-ion batteries to reduce the risk of fires and environmental hazards.
• Signal interference: Avoid electronic disturbances that could lead to loss of drone control.
• Collisions with larger aircraft: Observe local regulations to prevent interference with helicopters, planes, and other drones.
• Privacy concerns: Create policies for vetting and storing footage; unintentional capture of private information can raise ethical and legal issues.
• Fines: Understand Federal Aviation Administration (FAA) and local guidelines for certification, no-fly zones, and proper registration and maintenance of drones to ensure you stay in compliance. When working outside the United States, determine the drone regulations for each site. For instance, New Zealand, a popular filming location, has implemented strict regulations and fines for unauthorized drone flights.

Commercial drone insurance

Most production companies today outsource filming services to a third-party commercial drone operator, but some are investing in their own drone equipment. Your insurance requirements differ depending on whether you own the drone.

Utilizing commercial drone operators

Even if you hire a third-party to film your productions, you have “vicarious” liability. That means someone could sue you for the actions of a contractor who is doing work on your behalf. For this reason, you want to:

• Select an established, reputable commercial drone operator.
• Make sure the operator carries high limits; otherwise, more financial burden could fall on your production company (avoid using operators with less than $1M coverage, and aim for more — $5M is better and often available).
• Ask the operator to add you as an “additional insured” on its policy (this helps places risk back on the operator if a claim of negligence occurs).
• Request a hold harmless agreement in the vendor contract, protecting your production company if someone sues the commercial drone operator for negligence.

If a U.S. commercial drone operator says they cannot provide an “additional insured” certificate, investigate why. The drone operator may not have the right type of policy for their business. Do not proceed with the vendor until you have written documentation of insurance protection.

When selecting filming locations outside the U.S., consider the insurance landscape. Thailand, for example, does not offer an “additional insured” certificate, meaning you take on more financial risk when you film there.

“Get-there-itis” is the biggest killer in aviation — rushing to get to a destination or meet a deadline.

Never coerce a drone operator to go against their own safety recommendations. A small drone operator who gets a big filming contract may worry that you won’t hire them again if they raise a safety concern. To help protect your production company from claims of negligence, agree contractually to honor the drone operator’s safety decisions. Emphasize a safety-first culture with every contractor you hire.

Buying your own drones and becoming an owner-operator

When you own and operate a drone, you assume 100% of the liability. You’ll need a commercial drone operator’s policy. And if you have a claim, that will stay on your record for five years, potentially affecting your renewal rates. (In contrast, if a third-party drone operator has a claim, that’s on their record, not yours.)

Some owner-operators choose to purchase hull coverage for physical damage to the drone. However, technology is evolving so rapidly that drones quickly devalue. Many production companies choose to skip hull coverage for drones and pay out-of-pocket to repair or replace damaged equipment.

If you own a drone, you may also need other types of insurance such as property insurance for the building where you store your drone equipment, premises liability insurance, and so forth.

Drones in the entertainment industry: Future trends

As drone usage in entertainment continues to expand, the risk landscape will evolve, too. Here are two emerging trends to watch:

• Autonomous drones: Future drones may be capable of executing complex filming sequences without human intervention.
• Enhanced safety features: Improved collision avoidance systems, more durable batteries, and other advanced features could help mitigate risks further.

As you choose commercial drone operators (or buy your own fleet of drones), talk with an aviation insurance specialist to understand what insurance companies are looking from a safety perspective. Regularly review your risk management and insurance strategies, in light of new technology and regulations, to make sure you have the right policies and procedures in place to protect your bottom line.

For more information

• Find Cameron Savaree-Ruess on LinkedIn.
• Learn more about our Aviation Insurance Solutions.

About the author

Cameron Savaree-Ruess specializes in non-owned aviation risks. He designs insurance and risk management strategies for drones, helicopters, and airplanes used in filming movies, TV shows, and ads.