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Drones in Agriculture and More


Drones have become big business in the world of aviation.

Today, drones represent the fastest-growing segment in transportation, with more than 853,000 drone registrations and more than 270,000 certified pilots at year-end 2021, according to the Federal Aviation Administration.

Certain sectors of the U.S. economy, such as the agricultural industry, are steadily expanding the use of drones. The agriculture drone market alone is predicted to be worth US$32.4 billion, said Benjamin Pinguet, product and solution manager at senseFly, a company that produces high performance fixed wing drones for professional use, in an article on PrecisionAg.

Drones have become big business in aviation, according to Camille Knight, a senior broker with CRC Group.

Increased use of drone technology to perform standard farming tasks, such as spraying crops with pesticides and fertilizer, is driving growth in this sector. And the prospect for using drones for aerial mapping of growing areas and other cost-saving, productivity-enhancing tasks is pushing agriculture professionals toward new technologies.

In addition to growth in the agricultural sector, the pandemic has pushed the growth of commercial drones for many other business operations, even in the insurance industry, to perform tasks such as inspections or post-storm damage adjustments.

While drone usage is rising, the insurance market for aviation in general, which includes drones, remains a small bunch, according to Knight, who says there are only about 18 to 20 carriers outside the Lloyd’s syndicate market. The aviation market includes everything from the smaller aircraft to big charter operations to even some airlines, Knight said.

It also includes drones, she added. These are not the everyday drones purchased at the hobby store. Commercial use drones can be hundreds of thousands of dollars in value.

The majority of drone claims are around physical damage, she said. “Their payloads can be like $100,00 or $200,000,” she said.

When insuring a commercial drone it’s important to understand that coverage is almost always written on an agreed amount, she said. “So it’s very important that you are insuring your aircraft at the right value.”

Also, make sure that pilots are complying with the FAA, she said. “Are the drones registered? Are they being operated for commercial use? If so, do the drone operators have the remote pilot certificate that’s required?” she said. “Just things like that you need to make sure that you’re in compliance with the FAA.”

It’s important to remember, as well, that aviation insurance market is a challenging one. Five or six years ago there were a few more carriers and excess capacity in the market, she said. Nowadays, she often finds it necessary to write coverages with multiple carriers.

“It’s more like quota shares today where, one company is going to write 25% and want to be the lead insurer. And then you have to find other markets to follow that line.”

Some carriers do not want to be a lead carrier and will only follow another company, she added. “So it’s a big web of additional things that you have to think about in addition to the already existing underwriting factors on the risk.” But there’s always a way to get the coverage, she said.

Aviation insurance is a market where expertise really matters. An experienced broker can help insureds navigate the complexities of this unique market and help clients find the most appropriate coverage, she added.