Consumer drone sales have increased rapidly in recent years and this trend is projected to continue . This has also increased the chances of personal injuries or property damage occurring as a result of inexperienced drone pilots or faulty devices. The insurance industry has responded to this development by creating a new product: drone insurance.

According to the Federal Aviation Administration (FAA), drones may only be flown within five miles of an airport when prior notice is given to airport and air traffic control. However, the number of incidents between drones and manned aircraft in U.S. airspaces has risen. New York/Newark was the site of most of the reported drone incidents in U.S. airspaces between December 2013 and January 2016. The number of reported drone incidents increased significantly from early 2014 to mid-2015, which may have been caused by the increase in sales or increased awareness of drones among pilots thus more reported incidents.

In a 2015 survey, 31 percent of risk managers in large and mid-sized firms in the U.S. cited inadequate insurance cover or potential injury/damage as their greatest concerns with commercial usage of drones. The uptake in drone insurance cover has however been slow. In a 2016 survey, only 19 percent of drone pilots admitted to owning any form of commercial drone insurance and half of them don’t plan to purchase it. In spite of this, the overwhelming majority of those surveyed thought that liability insurance should be compulsory for all commercial drone pilots in the United States.

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