' Sara Prendergast | MTTLR

Drones, Damages, and Risk Allocation

The concept of Unmanned Aerial Vehicles (UAVs) has been a traditional favorite of science fiction art and literature, but the prevalence of these vehicles is quickly becoming our modern reality. From photography, to delivering packages, and even assisting in disaster relief, UAVs present an opportunity for a wide array of beneficial uses. However, as the uses and sophistication of UAVs continue to rapidly advance, the insurance and legal markets struggle to keep up. And this is not an industry to be ignored. According to Teal Group, an aerospace and defense consulting company, annual spending on UAVs is set to reach over $11.6 billion by 2023. There are many areas where the regulation of drones still needs to be worked out, but one of the largest problems is with the insurance market—or lack thereof—for drone technology. Much like automobiles, UAVs have the potential to get into accidents, cause property damage, and commit torts, particularly in the areas of trespassing and privacy invasion. Unlike automobiles, though, there are very limited laws on UAV insurance requirements.  This means that if a UAV were to cause large property damage, there is no guarantee that the owner would have the ability to pay for it. This has only resulted in minor issues in the past, where most UAVs are relatively small and are flown by hobbyists. However, as the commercial UAV market expands, these vehicles will almost certainly become bigger, more complicated, and more widely used, which creates a need for standardized nationwide insurance requirements for these aircraft. According to the National Association of Insurance Commissioners, commercial UAVs would likely need liability, property, personal...