Drone insurance is growing popular as many types of businesses have adopted drones. They have become the preferred mode of delivery or photography. A drone can be an expensive piece of equipment costing several lakhs of rupees. Hence, it is important to insure your drones and several insurance companies today provide comprehensive coverage to remotely piloted aircraft or drones.
Key Takeaways
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The Shield of No-Fault Relief: Victims of industrial accidents can access emergency funds quickly because the law allows claimants to seek help without having to plead that the damage was due to negligence.
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The Shadow of Industrial History: The law stems from the world’s worst chemical disaster, when over 30 tons of methyl isocyanate gas was released from the Union Carbide pesticide plant in Bhopal.
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Mandatory Hazardous Protection: Heavy manufacturing sites face strict compliance rules, forcing any business that owns or controls the handling of hazardous substances to maintain active insurance.
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Consolidated State Support Pools: To prevent funding shortages after major accidents, the law empowers the government to constitute an Environmental Relief Fund to provide immediate relief.
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Broad Eligibility for Victims: The application process is built to be accessible, allowing the injured party, property owners, or legal representatives of the deceased to bring a claim.
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Evidence-Driven Claim Approvals: Receiving emergency insurance money depends on clear documentation, requiring businesses to collect evidence, proof, and appropriate medical certificates right after an accident.
What is Drone Insurance?
It is a comprehensive insurance product that covers the loss, damage, or theft of a drone. It includes coverage of the drone’s payload, for attached camera/equipment, and any third-party liabilities due to any damage caused by the drone to a counterparty.
The DGCA guidelines initially offered coverage to drones within a Visual Line of Sight (VLOS) and during the day. However, the DGCA changed the guidelines to offer coverage beyond the visual line of sight. Public authorities extensively used drones for health surveillance activities in Covid-affected areas to ensure proper social distancing among communities.
Hence, Insurance companies can insure any drone used for commercial usage under comprehensive insurance under the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation (MoCA).
There is a comprehensive coverage product where the operator will be able to opt for Hull and Liability cover.
Additional Read: How does product recall liability policy work, and what does it cover?
Features and benefits offered by drone Insurance plans:
Comprehensive drone insurance covers the risks below:
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Hull cover:
This covers theft, damage, or loss of the drone or its disappearance due to faulty drone operation within the scope of the policy. However, the insurance excludes loss arising due to wear and tear and gradual depreciation of equipment over time.
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Payload cover:
This offers coverage for accidental damage to equipment or the payload arising from damage to the drone while in operation. The payload could include, for instance, fertilizers that are being sprayed by drones.
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Equipment cover:
This offers coverage for spare parts, engine/motor, and other equipment damaged during the operation of the drone.
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Personal accident cover:
This coverage is applicable for the authorized operator who sustains any physical injury that arises due to drone operation and for the occurrence of any accident.
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Medical insurance cover:
Medical insurance cover is allowed for the authorized operator of the drone. The policy covers any hospitalization due to physical injury arising due to drone operation.
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Third-party liability:
This feature provides coverage for damages caused by the drone including accidental bodily injury or any damage to the property of the counterparty. Third-party liability covers consequential losses that arise out of drone operation.
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Add-on covers in Drone Insurance:
There are many add-on covers, which also offer a pay-per-use model of payment. These provide consumers with a holistic experience of a customized drone insurance plan that aligns with their coverage requirements.
All coverage is offered within compliance with DGCA guidelines. However, the policy does not cover any loss or damage to an insured drone outside of the guidelines.
Additional Read: What are the different types of liability insurance?
Which insurers offer drone insurance?
There are several general insurance companies that offer drone insurance in India. The prominent ones are:
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HDFC ERGO General Insurance Company Limited:
HDFC ERGO in partnership with Tropogo offers commercial drone operators and owners drone insurance since 2019. They offer flexible, pocket-friendly insurance plans that offer ‘pay as you fly for authorized drone operators.
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Tata AIG General Insurance Company Limited:
TATA AIG General Insurance Company tied up with the Drone Federation of India (DFI) for design to provide drone insurance coverage. They tailor-make drone insurance products for authorized operators within the regulatory framework laid out by IRDAI.
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ICICI Lombard
ICICI Lombard offers comprehensive coverage for authorized drone operators and owners. It also offers a range of add-on covers including BVLOS (Beyond VLOS) endorsement, invasion of privacy cover, alternate hire charges, cyber liability cover, and drone war liabilities, etc., they offer the pay-per-use model which enables applicants to choose the right policy as per their needs.
Summary Table: Statutory Framework and Operational Mandates of the Public Liability Insurance Act 1991
| Regulatory Vector | Statutory Mechanism & Provision | Legal Responsibility Rules | Financial & Operational Channels | Historical & Practical Context |
| No-Fault Liability | Section 3 of the Act removes the standard requirement to prove a business was negligent. | The factory owner is directly responsible for providing immediate financial relief. | Victims can claim compensation quickly without long fault-finding lawsuits. | Drafted to ensure survivors get rapid economic relief after industrial mishaps. |
| Environmental Relief Fund (ERF) | Formed by the state to provide supplementary financial support. | Financed through a mandatory levy equal to the insurance premium. | The District Collector coordinates and distributes these funds to local victims. | Acts as a second layer of money if a major disaster drains the initial policy limits. |
| Hazardous Material Scope | Binds companies that handle materials listed under the Environmental Protection Act 1986. | Applies to any business that processes, stores, or moves dangerous materials. | Requires mandatory coverage scaled to the firm’s total paid-up capital. | Spurred by the 1984 disaster where over 30 tons of toxic gas leaked in Bhopal. |
| Claims Application Protocol | Identifies the specific individuals eligible to seek legal relief under the policy. | Open to injured individuals, property owners, or legal heirs of the deceased. | Managed via an authorized agent or directly filed by the victim’s family. | Requires submitting formal claim papers with validated medical certificates. |
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TROPOGO
TROPOGO is a technology giant that offers this insurance cover for its authentic customers. They offer three types of plans, namely for commercial pilots which offer the flexibility of coverage for hourly, daily, and monthly operation of drones, and for enterprise clients which offer coverage for unlimited flights within India with a duration between 01 month to 01 year. The coverage can be extended for up to 20 drones within a single insurance plan.
Drone insurance, as a product is at a nascent stage, it may be a while before all types of risks are identified and the products are standardized and comprehensive. Like other insurance products, it is important to compare features across offerings. Securenow is happy to provide comparisons that fit your requirements.
Frequently Asked Questions (FAQs)
1. What is the main objective of the Public Liability Insurance Act 1991 in India?
A) The primary objective of the Public Liability Insurance Act 1991 is to provide immediate financial relief to individuals, third parties, and local communities affected by industrial accidents. The law mandates that any enterprise handling hazardous substances above prescribed quantities must maintain a statutory insurance policy. This requirement ensures the business has enough money to cover public injuries, deaths, or property damage without causing immediate financial ruin to the company or the surrounding neighborhood.
2. How does the principle of no-fault liability function under Section 3 of the Act?
A) The no-fault liability principle under Section 3 is a major consumer protection rule that removes the burden of proof from the victim. In standard civil lawsuits, an injured person must spend years in court proving that a factory’s management acted carelessly. Under this statutory act, the claimant is not required to plead or establish that the injury or damage was caused due to the owner’s negligence. If an accident involving hazardous materials happens, the owner is immediately liable to pay the scheduled relief.
3. What is the Environmental Relief Fund (ERF) and how is it funded?
A) The Environmental Relief Fund (ERF) is a specialized public safety fund managed by the central government to provide immediate medical care and rehabilitation for industrial disaster survivors. It is financed directly by the industries that handle hazardous materials. When a factory pays its regular premium to the insurance company, the law requires them to pay an additional identical amount that is credited directly to the Environmental Relief Fund.
4. Who is eligible to file a claim for relief under the Public Liability Insurance Act?
A) When an industrial disaster occurs, the application for immediate economic relief can be filed by several authorized individuals:
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The specific individual who sustained the physical injury or illness.
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The actual owner of the property that was damaged or destroyed by the accident.
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In cases where the accident resulted in a loss of life, the legal representatives or heirs of the deceased.
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An authorized agent acting on behalf of the injured person, property owner, or the deceased worker’s family.
5. What step-by-step process should be followed to file a public liability disaster claim?
A) To secure a claim payout from a statutory public liability policy, the affected parties should follow a clear process:
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Immediately evaluate and analyze the total physical or structural damage encountered.
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Collect clear evidence, photos, and police reports from the accident site to submit to the claims adjuster.
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Secure an appropriate medical certificate or official autopsy report in case of physical injuries or death.
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Submit a duly filled claim form along with all supporting safety documents directly to the District Collector or the insurance provider for processing.
6. Which historical industrial disaster led to the creation of the Public Liability Insurance Act?
A) The statutory act was created due to the severe lessons learned from the 1984 Bhopal gas tragedy. In that industrial accident, over 30 tons of toxic methyl isocyanate gas leaked from a pesticide plant, causing thousands of immediate deaths and leaving generations of survivors with chronic health issues. The long legal delays in getting compensation to those victims prompted the government to pass a law ensuring immediate, mandatory insurance coverage for all hazardous facilities.
About The Author
Rajesh Mehta
MBA Finance
Rajesh has become a distinguished expert in liability insurance with over 8 years of extensive experience in the insurance industry. As a dedicated writer for SecureNow, he crafts insightful and informative blogs and articles that help businesses and individuals understand the nuances of liability insurance, from policy details to industry trends. Throughout his career, Rajesh has developed a profound knowledge of various types of liability coverage, including professional, general, and product liability insurance. Their expertise enables them to break down complex topics into accessible content, making it easier for readers to make informed decisions about their insurance needs.