A Senate Committee Inquiry into current and future regulatory requirements that impact on the safe commercial and recreational use of drones has attracted commentary from insurance industry bodies such as the Insurance Council of Australia and QBE.
The inquiry (the second of its kind in recent years) launched in late 2016 and sought input on a wide range of issues including, but not limited to:
- Regulatory requirements that impact on the safe commercial and recreational use of drones;
- Current and future options for improving regulatory compliance; and
- Insurance requirements of both private and commercial drone operators.
The Rural and Regional Affairs and Transport References Committee is not due to report on the matter until December this year, leaving the future of drone regulation – and its impact on insurance – up in the air.
Drone regulations: a balancing act
Submissions, which closed in December 2016, attracted substantial commentary from the insurance industry as well as the public sector, the legal profession and aviation safety authorities.
In the insurance sector drone technology has applications in underwriting risk assessment, complex and large scale claims assessment, rural hazard assessment and more. In its submission the Insurance Council of Australia (ICA) highlighted that ‘Australian insurers are already using remote piloted aircraft systems (RPAS)…leading to reduced insurance administration costs and faster claims processing.’
Recognising that RPAS and unmanned aerial systems (UAS) present ‘a unique set of risks to both property and persons,’ the ICA supports a regulatory regime that ‘promotes innovation.’ What we need, according to the ICA, is ‘evidence based regulation that balances innovation with the need to mitigate the risks’ of drone technology.
Global insurer QBE was much more focussed on the risks of RPAS and, in particular, the recently relaxed regulatory requirements for drone operators. In its submission the insurer argued that ‘…allowing operators to use RPAS without a minimum education requirement places both the safety of operators and members of the public at risk.’ As such, QBE advocates for the reinstatement of certificate and license requirements for commercial operators, as well as a minimum education requirement for hobbyists.
Speaking to Gallagher, Darren Trott, National Business Development Manager at Crawford & Company, echoed QBE’s concerns about the relaxed regulations:
‘…The question is: who’s providing the safety training? Where’s the evidence that businesses and operators understand the regulations and laws around safety, or privacy? The Civil Aviation Safety Authority (CASA) can’t police every drone user – especially since you can go out and buy a drone from a shop and use it straight away without even being aware of the regulations.’
Regulations should, QBE argues, also require operators to have a minimum level of insurance:
‘It is important to be aware that aviation and third party liability insurance generally excludes coverage for unlawful activities. QBE is concerned that the operators’ failure to understand applicable regulations may lead them to engage in conduct which falls outside of the scope of their liability cover.’
‘For the protection of third parties, consideration may…be given to requiring some operators to hold a minimum level of aviation and third party liability insurance. This would ensure that members of the public who are injured or suffer damage to property caused by an RPAS would be able to access compensation…’
What does this all mean for drone operators?
The Senate Committee is yet to release its report and will host a public hearing in Dalby, Queensland on the 16 March 2017 to discuss matters relating to the inquiry.
For now the CASA regulations introduced in September 2016 remain in effect. Drone operators are strongly advised to familiarise themselves with these rules, obtain any required certifications and licenses, and to stay up-to-date with the evolving regulatory requirements.
Darren Trott encourages all business owners and potential drone operators to make sure they’re compliant with the current regulations and that they’ve got the right insurance cover:
"If you’re considering taking advantage of the regulation changes and using drones for commercial purposes, you’ll need to notify your broker or insurer right away. You need to have the right insurance cover, and most policies won’t include this as standard."
Trott went out to say that it's quite possible when it comes to drone insurance insurers "will want to see demonstrable understanding of the regulations."
A comprehensive guide to drone regulations can be found on the CASA website.