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Increased drone use for last mile delivery will increase pressure on regulators globally to make third-party liability cover compulsory

  • Market Insight 10 December 2021 10 December 2021
  • Global

  • Insurance 2022 - the year ahead

The rapid growth in the use and deployment of drones creates significant ongoing challenges for regulators to appropriately assess the risk and to introduce a regulatory framework commensurate with that risk.

A particular and immediate challenge confronting regulators is how to integrate drone activity into non-segregated airspace without undermining existing aviation capacities or compromising safety levels for other aircraft, passengers, and other persons and property on the ground.

In many jurisdictions, such as the UK and the EU, compulsory third-party insurance requirements are already in place with commercial and recreational drone operators required to have cover dependent upon the risk their operations pose. Factors such as weight and specifications of the drone and the operation it is intended to undertake determine the level of risk. Conversely, in the USA, Australia and New Zealand, for example, drone operators are not at present required to take-out third-party liability insurance, but such cover is strongly recommended.

However, the use of drones in high density population areas with their increasingly deployment, for example, in last mile delivery contexts will focus regulators’ minds everywhere on compulsory third party liability cover to ensure that members of the public have recourse to compensation in the event of drone accidents occurring.


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