The potential of drones for good is great.
This includes delivering medicines to hard to get to places, helping to decide where to place resources during disasters and just the sheer joy of seeing video clips of nature or man-made structures from a bird’s-eye view.
However, there is a downside, a darker element.
Lloyd’s, the insurer, has taken a look and the technology and says there are significant risks to users.
“This is, of course, true of many emerging technologies,” Lloyd’s says in study, “Drones Take Flight”.
“However, drones are expected to receive particular scrutiny because of the technology’s military heritage and surveillance capabilities. Adequate insurance coverage will likely be of particular importance to protect users against emerging risks.”
The five risks identified by Lloyd’s:
Negligent or reckless use: Lloyd’s says the human factor will be a key consideration for insurers. Training and licensing schemes of operators will be important.
Patchy regulation: Regulation is inconsistent from one country to another. “A robust regulatory framework is expected to be crucial to the provision of insurance for drone operations,” Lloyd’s says.
Poor enforcement: The industry is growing too rapidly and unevenly for regulators to provide strong oversight. “Tracking/ monitoring technology could also help operators avoid breaking laws in the first place, such as by supporting the development of geo-fencing technology to ensure drones do not stray into controlled airspace,” Lloyd’s says.
Vulnerability to cyber attack: “Cyber security measures will likely be increasingly significant for underwriters’ risk assessment of commercial drone operations,” Lloyd’s says.
Privacy infringement: Lloyd’s says professional indemnity insurance could be used to cover any damages awarded for breach of privacy against drone operators. But to get that insurance, drone pilots will probably need to sign privacy assessments and comply with regulations and laws.
Lloyd’s says global expenditure on drones is expected to double to $91 billion over 10 years.
The range of applications continues to grow, as outlined in this chart compiled by Lloyd’s:
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