Stakeholders in the drone industry do understand that flying drones into places they are legally not supposed to be is a nuisance the industry can really do without, given how hard a task it already is to convince aviation authorities to allow the drones in the air alongside other aircraft.
But one company sees an opportunity for insurance companies in this unfortunate reality.
And it might as well too; because DroneShield itself owes its existence to the illegal oprations of drone technology by drone idiots and criminals – the company develops software and hardware that protects people, organisations and critical infrastructure from drone intrusions.
And the DroneShield CEO is of the opinion that insurance companies can do the same too.
Oleg Vornik thinks insurers should consider offering insurance policies that shield organisations against direct costs from drone disruptions, particularly for venues and firms that take measures to minimise the threat.
Drones can disrupt airports, stadium events and power generation, or be used to carry out cyberattacks, yet insurance policies are generally unclear on this threat.
For instance, the two-day shut down of London’s Gatwick Airport during the busy 2018 Christmas period – thanks to a drone sighting in the airport’s vicinity – cost the airport an estimated $US64.5 million.
The Emirates Authority for Standardisation and Metrology has estimated that a drone disruption would cost Dubai International Airport just under $US100,000 each minute.
Just last week, air traffic had to be re-routed from an airport in Madrid to neighbouring destinations, after a drone was sighted around the area. According to Vornik, there is an opportunity for insurers to address a protection gap with new policies, and also to reward policyholders that mitigate this threat.
In an interview with insuranceNEWS, Vornik said expanding “counter-drone insurance” into an add-on policy represents a meaningful market opportunity for airport, utilities, corporate/data centres, stadiums/special events, and other sensitive location customers.
"This would reduce ambiguity for asset owners and close the gap in risk profile from this rising threat,” Vornik said.
“Offering concessions and/or specific counter-drone insurance add-ons – similar to what insurers have done with cyber insurance – would give insurers a competitive differentiator to win new business.”
Drones conducting cyber attacks can mimic a Wi-Fi network to steal data, hijack bluetooth peripherals, perform keylogging operations to steal sensitive passwords, and compromise access points, unsecured networks and devices.
All these situations create a loss, which becomes the responsibility of either the insurer and/or asset owner.
Drones have evolved into "formidable flying machines,” Mr Vornik says, with a $2,000 drone from a retail store able to fly up to ten kilometres, have sophisticated detect-and-avoid flight features, operate autonomously via GPS coordinates, and carry anything from contraband to a prison to explosives.
They also come with high-power cameras, and work in “sophisticated swarms.”
“While legislation technically stops people flying drones close to sensitive locations, in practice it’s a regular occurrence, due to people either not knowing the rules, not caring to follow them, or deliberately breaking them.
“At this stage, it’s unclear how the costs of such disruptions are managed, and whether they are included in insurance policies. We expect that over time, organisations will request to explicitly include drone incidents as a covered item in these policies.”
Vornik said insurers should consider whether installation of a counter-drone system is a pre-requisite to cover in the same vein as a fire alarm is for fire insurance, adding the war in Ukraine is an extraordinary example of the ability of an “ordinary person” to use a cheap consumer drone to conduct surveillance and attacks.
"This is expected to translate into more drone threats domestically,” he said.