Not long ago, commercial drones were primarily used for aerial photography and videography. Today, they are essential
operational tools across a growing range of industries.
Construction firms use drones to monitor project progress and document site conditions. Utility companies inspect power lines and critical infrastructure remotely. Municipalities deploy drones for emergency response, disaster assessment, and public safety operations. Surveyors, engineers, contractors, and public entities increasingly rely on drone technology to improve efficiency, reduce costs, and enhance worker safety.
As drone technology advances, its role in business operations continues to expand. The Federal Aviation Administration (FAA) is actively advancing Beyond Visual Line of Sight (BVLOS) capabilities, allowing drones to operate farther from their pilots and perform more complex missions.1 These developments are expected to support everything from infrastructure inspections and agriculture to emergency response and package delivery.
The opportunities are significant, but so are the risks.
As organizations integrate drones into core operations, they face increasing exposure to bodily injury, property damage, operational disruption, privacy concerns, and regulatory compliance issues. What was once considered a niche exposure has become a mainstream risk management and insurance consideration.
COMMERCIAL DRONE USE HAS ENTERED A NEW PHASE
Organizations continue to adopt drone technology because it delivers information faster, safer, and often more cost-effectively than traditional methods.
Inspecting a bridge, transmission tower, rooftop, or large industrial facility once required workers to climb structures, operate lifts, or temporarily halt operations. Drones now complete many of these tasks in a fraction of the time while reducing employee exposure to hazardous conditions.
The economic impact is substantial. According to the Association for Uncrewed Vehicle Systems International (AUVSI), commercial drone adoption is expected to contribute billions of dollars to the U.S. economy as usage expands across industries.2
The FAA reports that more than 400,000 commercial drones are registered in the United States.3 As adoption accelerates, insurers are seeing a corresponding shift in underwriting requirements. What was once a relatively straightforward aviation exposure is becoming a far more nuanced operational risk. Underwriters increasingly need to understand not only whether an organization uses drones, but how integral those drones are to daily operations. For many insureds, drones have evolved from supplemental tools to critical assets that support inspections, data collection, project management, public safety, and infrastructure maintenance.
NEW TECHNOLOGY IS CREATING NEW LIABILITY EXPOSURES
Drone risks continue to evolve alongside drone capabilities.
Aerial photography presents a very different exposure profile than inspecting transmission lines, monitoring active construction projects, or supporting emergency response operations.
One of the most significant developments is the continued expansion of BVLOS operations. Historically, operators were required to maintain direct visual contact with their aircraft. Expanded BVLOS authority allows drones to travel greater distances and perform larger-scale missions.1 That capability creates significant operational advantages, but it also broadens potential liability.
The farther a drone travels, the more people, vehicles, structures, and infrastructure it may encounter. Mechanical failures, software malfunctions, communication interruptions, navigation errors, or operator mistakes can result in property damage, bodily injury, or business interruption losses.
Drone operations are also increasingly concentrated around active worksites, public roadways, critical infrastructure, and populated areas, environments where even minor incidents can generate substantial claims.
HIGH-EXPOSURE INDUSTRIES ARE DRIVING BOTH ADOPTION + UNDERWRITING SCRUTINY
Construction firms, infrastructure operators, utilities, and public entities are among the most active users of drone technology.
These applications deliver significant operational advantages, but they also place drones in some of the most challenging environments to underwrite.
Many drone flights take place in high-risk environments where people, equipment, infrastructure, and ongoing operations intersect. When something goes wrong, whether due to a mechanical issue or operator error, the resulting claim can involve bodily injury, property damage, operational disruption, or all three.
DRONE UNDERWRITING IS ENTERING A NEW ERA
Drone underwriting has become significantly more sophisticated over the past several years. Early underwriting discussions often focused on basic questions such as aircraft value, pilot certification, and anticipated flight activity. Today’s risks require a much deeper evaluation.4
Underwriters increasingly assess drone operations through the lens of operational complexity. A contractor conducting occasional roof inspections presents a very different exposure than a utility company operating a fleet of drones across multiple states or a municipality deploying drones during emergency response events.4
Several factors are becoming increasingly important during the underwriting process:1, 4, 6, 7
- Beyond Visual Line of Sight (BVLOS) operations
- Flights over populated areas
- Operations near critical infrastructure
- Fleet size and growth projections
- Pilot training and recurrent education programs
- Maintenance and equipment management protocols
- Autonomous or semi-autonomous flight capabilities
- Data collection and cybersecurity controls
- Reliance on third-party drone vendors
- Organizational dependence on drone-generated information
The industry is also seeing a shift from evaluating individual flights to evaluating enterprise-wide drone programs. Organizations with clear governance, documented procedures, formal training requirements, and mature operational controls are often viewed more favorably than those relying on informal processes or decentralized oversight.4 As drone technology continues to evolve, underwriting is increasingly focused on risk quality rather than simply drone ownership.
BOTTOM LINE
Commercial drone technology is transforming how organizations inspect, monitor, and manage assets. As adoption accelerates across construction, infrastructure, utilities, telecommunications, and public-sector operations, the liability exposure associated with drone use is becoming more complex. What began as a niche technology is rapidly becoming a critical business tool and a growing focus for insurers.
The drone industry is evolving quickly, and insurance programs must keep pace. Starwind Casualty combines specialized aviation knowledge, underwriting experience, and responsive service to help wholesale brokers navigate the complex liability exposures created by commercial drone operations. From construction and infrastructure projects to public entity and utility applications, Starwind Casualty delivers tailored unmanned aircraft solutions that help clients embrace innovation while managing risk with confidence.
CONTRIBUTOR
Michael Johnson, CPCU, ARe, is President of Venture Underwriters, a Starwind Casualty program, with more than 25 years of casualty insurance industry experience.