Drone accident could cost $10m

30 September 2016

Drones have the potential to cause accidents costing up to $10m, an insurance company has warned.

In a report Allianz Global Corporate & Specialty (AGCS) called for systematic registration of drones as well as robust training for operators.

“A pilot losing control of a UAS [unmanned aircraft system] during a building inspection could result in a total liability easily in excess of $5m, if the UAS crashed into a truck or shop, for example,” said the report. 

“Even a small UAS could cause as much as $10m in damage alone when hitting an engine of an airplane.”

The US Federal Aviation Administration (FAA) has predicted that by the end of 2016 over 600,000 UAS will be deployed for commercial use alone in the US – three times the number of registered manned aircraft.

Worldwide this will lead to a drone market of 4.7m units by 2020 worth $127bn, up from a current $2bn.

The report raises safety concerns over possible midair collisions with piloted aircraft, particularly at low level, or those caused by the loss of control of a UAS.

“Reports of UAS sightings from pilots, citizens and law enforcement have increased five-fold over the past year in the US,” said the report.

Loss of control presents a particularly common risk as the drone could fly beyond the range of its controller or could fall victim to hacking or lose its signal due to interference. Drones could also be used by terrorists.

James Van Meter, an aviation practice leader at AGCS, said: “There have already been enough incidents and near misses to date involving UAS to generate concern that the likelihood of collisions and other loss events will grow as numbers multiply.”

However, the report predicts drones will cut costs and solve problems in areas such as industrial inspections, aerial photography, border patrol, emergency deliveries, crop surveys and disaster relief.

Drones have also become a tool for insurers to make risk assessments of construction and infrastructure projects easier and safer or to facilitate relief claims following major disasters.

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