Analysts have predicted that global spending on drones will reach more than $90 billion over the next 10 years as the list of applications for the technology expands to include crop monitoring, emergency services, product delivery, news production, data gathering and more.
According to a recent report by Lloyd’s, however, there are five fundamental risks facing the drone industry that could influence its future growth, including privacy infringement issues, negligent or reckless pilots, and the vulnerability of drones to cyberattack. Inconsistent regulations are also a concern as laws and licensing requirements vary widely between jurisdictions. In addition, the rapid growth of the industry has made it difficult for authorities to enforce regulations.
Standard drone insurance programs currently cover third-party liability, physical loss and damage to system components, but as the sector expands, so will its risks. This may require insurers to develop new insurance products to meet industry needs.
“As the market for drones continues to grow, so does the interaction of risk exposures,” said Nick Beecroft, manager of emerging risk and research at Lloyd’s. “Manufacturers, operators and regulators will need to work together, on a global basis, to understand exposures and ensure this technology is used safely and responsibly.”