Is Your Drone Illegal? Should You Have Drone Insurance?

Find Out What’s Required If Your Business Has a Drone

Are you using your drone illegally? Even if it’s legal, do you need drone insurance?

First, if you are charging for the use of your drone, according to the Federal Aviation Administration, you need certification.

In addition, drone insurance is a relatively inexpensive precaution. This is true even if you are simply using the drone in your own business or as a hobby and are therefore exempt from the requirement for FAA certification.

That’s the advice from Doug Johnson, president of JSL Aviation Insurance, a division of J. Smith Lanier & Co. here, and an aviation specialist member of RiskProNet International, an association of independent insurance brokers in North America.

How many drones are operating illegally? It’s hard to say and exact figures on the number of drones are hard to find. However, pilots have reported 25 near misses with drones to the FAA, according to The Telegraph newspaper. Only 46 companies were certified by the FAA as of this writing to operate drones for commercial use, even though some predict as many as 7,500 commercial drones will be flying in the U.S. within the next five years.

“These figures indicate that many drones could be operating illegally and possibly without insurance,” Johnson said. “Most people fail to realize that neither standard business commercial general liability policies nor homeowners policies will protect you for drone operations. They are classified as aircraft and typically require aviation insurance. The cost of drone insurance is reasonable, and people would be wise to purchase it.

The word drone today is generally considered to mean any type of flying vehicle operated without a pilot on board. They are advanced versions of the radio-controlled model airplanes long operated as hobbies, but with significantly more sophisticated capabilities in terms of the range they can fly and the missions they can perform.

They are used in fields including law enforcement, real estate, construction, news coverage, agriculture, search and rescue, patrol flights, mining operations, railroads, remote medical care, hurricane tracking, package delivery and hunting.

If you sell real estate, for example, and you use a drone for aerial photography of clients’ properties, you are most likely operating legally in the eyes of the FAA as long as you don’t charge clients specifically for the use of the drone, Johnson said. However, if your business is taking aerial photos from a drone, FAA certification is required.

What are the potential risks of drones?

“Most drone operations are so new it is difficult to say with certainty,” Johnson said. “If a construction company is building a power plant in a remote area and using a drone to inspect the roof, the risk is probably minimal. But let’s say you’re using a drone to inspect the windows in a 30-floor skyscraper in the middle of a city, you lose radio contact, and the drone crashes. The consequences could be quite serious, and the FAA is saying, ‘Wait a minute’ while we take a longer look at this.”

The FAA is seeking comments by April 24 on proposed rules that would allow commercial flight of drones at heights of up to 500 feet and speeds of up to 100 miles per hour during daylight hours. Drones would have to be flown by a licensed drone operator – a newly created certification - and remain within sight of the operator. They could not fly over people except those directly involved in the drone operation. Final rules are expected by fall.

“Drones are becoming ubiquitous,” Johnson said. “Many people fail to perceive them as a risk because nothing really bad has happened yet. But everything bad always happens at the worst possible time. If you do have a drone and it flies off on its own and injures someone, you’ll be very glad if you have an insurance company on your side.”

In addition to J. Smith Lanier & Co., RiskProNet members include AH&T Insurance, Virginia; Associated Financial Group, Minnesota; BFL Canada Insurance Services, Inc. in Canada; Brady, Chapman, Holland & Associates, Texas; Connor & Gallagher Insurance Services Inc., Illinois; Dawson Companies, Ohio; Eustis Insurance & Benefits, Louisiana; Herbert L. Jamison Co., LLC, New Jersey; InterWest Insurance Services, Inc., California; J. W. Terrill, Inc., Missouri; Johnson, Kendall & Johnson, Inc., Pennsylvania; M3 Insurance Solutions for Business, Wisconsin; Moody Insurance Agency, Colorado, Old National Insurance, Indiana; Regions Insurance, Inc., Arkansas; Reynolds & Reynolds, Inc., Iowa; SterlingRisk, New York; SullivanCurtisMonroe Insurance Services, LLC, California; Waldman Bros., LLP, Texas; and Watson Insurance, North Carolina. More than a third of RiskProNet’s members are routinely included on the Business Insurance list of the 100 largest brokers of U.S. insurance.

J. Smith Lanier & Co., headquartered in West Point, Georgia, is an employee-owned company that was founded in 1868 and has become one of the largest privately owned insurance brokers in the United States. Since 1868, the company has grown from a three-employee local agency to a major regional firm employing over 570 employees in eight divisions and 19 branch offices. J. Smith Lanier & Co. offers commercial and personal lines insurance, employee benefits, surety, aviation and risk control.

RiskProNet International is headquartered in Menlo Park, Calif. For additional information or the name of an aviation insurance specialist in your area, go to or contact RiskProNet Executive Director Gary Normington at (650) 323-1929 or