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A guide to the benefits and risks of drones for business

At a glance

  • An increasing number of businesses are now using drones – or considering doing so
  • Uses range from surveillance, to videography and 3D-printing
  • We weigh up the benefits of using drones commercially alongside the risk and insurance considerations

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As recently as 2010, only five commercial operators had permission to fly drones in the UK. By August 2018, that figure had soared to 4,530.

A growing number of businesses are now exploring the potential benefits of drones and considering introducing them into their operations.

How are businesses using drones in 2019?

Common examples of drones being used for business include:

  • Delivery companies sending items directly to the addressee
  • Security firms using them to monitor properties and land remotely
  • Surveyors using drones mounted with HD cameras to pick up small cracks or other damage to property and to assess hard-to-access structures such as bridges or skyscrapers

In recent years, organisations have found increasingly inventive uses for drones. These range from delivering defibrillators to heart attack patients to using swarms of drones to 3D-print buildings. A number of UK companies, including Rolls Royce and Aston Martin, are reportedly developing drones to carry people.

In the insurance space, drones are also having a big impact. In a previous Insider article, we explained how Zurich has used drones across the world to assess damaged properties in dangerous locations, enabling claims to be processed quicker.

Key benefits of commercial drones

There are wide-ranging benefits to using drones, including:

  • Speed: Drones can enable retailers and other businesses to deliver products and services faster than ever before. This year, Amazon is set to begin delivering packages to customers in the US using drones and it will be able to deliver goods in a 15-mile range within 30 minutes
  • Cost, efficiency and sustainability:Drones offer a more efficient and environmentally friendly way to make small, one-off deliveries compared to traditional delivery vehicles. Drones an also reduce the amount of manpower and specialist equipment required. For example, a security or surveying company can send a drone to monitor a remote site rather than a team of staff in a helicopter
  • Safety: Drones are particularly useful for performing tasks that would pose safety risks to humans. This includes surveying towers and tall buildings, assessing damaged properties and inspecting mines
  • Innovation: The versatility of drones enables businesses to develop products and services that would once have seemed impossible. For example, UK company Animal Dynamics has developed a miniature “dragonfly drone” weighing less than 50g. This small drone is capable of operating in high winds, making it useful for surveillance in remote locations and complex search and rescue missions

The risks of using drones commercially

Any use of drones carries a degree of risk, but there are particular risk and insurance considerations for businesses using drones commercially.

Legal restrictions on drones

Firstly, there are complex restrictions about how and where drones may be used. Any organisation hoping to fly drones for commercial purposes in the UK must first obtain Permission for Commercial Operations (PfCO) from the Civil Aviation Authority.

Before each flight, the operator must also obtain permission from the owner of the land from which the drone is to be launched. There are additional restrictions surrounding the use of drones in built-up areas or near large crowds.

Adding to this complexity is the fact that the legal and insurance framework for using drones varies significantly from country to country. What is acceptable in one part of Europe, for example, may not be permissible in another.

Drone liability

While damage to the drone itself is an obvious consideration for any business using drones, a more significant risk is damage to property or injury to people. Any business considering using drones should first discuss with their broker or insurer what their potential liabilities could be, and what insurance coverage is available to protect against these liabilities.

In addition to property damage or personal injury, these liabilities could also relate to data or privacy issues, for example if a drone is being used for photography or videography.

Final considerations

It is important to stress that the risks associated with drones may vary significantly from business to business. For example, a company using drones in a rural setting, on land it owns, is likely to face less exposure than a business using drones in an urban environment.

The way that drones are used will also affect the type of permissions required from the Civil Aviation Authority, and potentially the availability of insurance.

Image © Getty

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