UAS Commercial Insurance: Part 107 Guide

Operating a commercial drone business without liability insurance is an unacceptable business risk. However, many remote pilots learn the hard way that their standard commercial general liability (CGL) policies completely exclude aviation incidents.

To protect your company's assets, you must understand the distinction between on-demand coverage and annual aviation policies.

The Aviation Exclusion Pitfall

Most standard business insurance policies contain a boilerplate "aviation exclusion." This clause means that if your drone suffers a hardware failure and crashes into a luxury vehicle, a commercial window, or worse, injures a pedestrian, your insurer will immediately reject the claim. Commercial UAS operations require a dedicated aviation liability policy.

Dedicated drone insurance is split into two categories: **liability coverage** and **hull coverage**. Liability coverage protects you from third-party property damage and bodily injury claims (typically starting at a $1 million limit). Hull coverage covers physical damage to your aircraft. If you are flying a standard consumer drone, you may choose to skip hull coverage; however, if you operate a $20,000 LiDAR rig, hull insurance is essential to protect your capital investment.

Insurance Models Compared: On-Demand vs. Annual

Pilots have two primary models for securing insurance. The right choice depends on your weekly flight frequency and contract requirements:

Securing Proof of Insurance

Large commercial clients and public agencies will require you to submit a Certificate of Insurance (COI) listing them as an "additional insured" before you can fly on their properties. Annual policies allow you to generate these certificates instantly via online portals at no additional charge, whereas on-demand systems may charge a minor premium adjustment. Choose the model that matches your volume to ensure you remain fully protected in the field.