India’s insurance regulator has urged insurance companies to launch tailor-made products for drone owners and operators. In a circular sent to insurance companies last week, the Insurance Regulatory and Development Authority of India (IRDAI), even offered a product structure for chalking out such policies, which includes offering cover to drone operators for any legal liability, accidents, and medical expenses, among other things. India’s drone rules mandate that drones flying in the air need to have an insurance cover. However, in the absence of specific insurance products, this provision has rarely been fulfilled.
“Considering the unique characteristics of Drones that differentiate them from other aircrafts and taking into account the phenomenal growth in the usage of Drones for multiple purposes, there is a need to augment the current insurance availability customized to the requirement of drone owners and operators,” the IRDAI said in the circular.
The circular comes after the IRDAI had set up a working group to explore contours of a drone insurance product, and the overall product architecture is in line with the recommendations which were made by the committee in November 2020. While noting that very few general insurers in the country currently offer insurance cover for drones and their operators, the regulator offered the following architecture to model drone insurance products:
- Cover Legal liability to third-party: The product should indemnify the insured against their legal liability to pay damages for third party civil claims arising out of bodily injury or death or property damage, by an accident or a handling error on part of the authorised operator. As of now, this cover should be offered in line with aircraft liability, IRDAI said.
- Physical damage to drones: The product should cover any repair or replacement of drones .
- Cover operators from any accidents: Drone operators should be covered against any injuries sustained by them while operating drones. The product should also cover for any medical expenses incurred by the operators while treating these injuries.
Apart from these, insurance providers can choose to offer coverage against invasion of privacy, any cyber liability, or night flying, among others, IRDAI said. While the circular didn’t offer any contours on how cover against invasion of privacy by drones could be afforded, the report presented by the working group had made the following recommendation:
“It is hereby agreed and declared that on payment of additional premium, the policy is extended to cover invasion of privacy committed by you, whilst operating a Drone in accordance with the terms and conditions of this Policy, during the Period of Insurance. Insurer will indemnify you against the sums that you are legally liable to pay as compensation subject to maximum amount mentioned in schedule, any one offence and in the annual aggregate.
For the purposes of this endorsement an “invasion of privacy” shall mean an invasion of any rights of privacy or any nuisance, trespass or interference with any easement or right of air, light, water or way.”
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MediaNama has prepared an exhaustive guide to the drone industry in India, encompassing regulations, use cases, concerns around privacy and surveillance, and the way forward for the industry. The guide is available here.