Insurers should consider offering a dedicated policy that covers the direct costs of drone disruptions, particularly for venues and businesses taking steps to mitigate the threat, says ASX-listed DroneShield.
Drones can disrupt airports, stadium events, power generation, or be used to carry out cyber attacks, yet insurance policies are generally unclear on this threat – much like how cyber has been covered in the past.
Oleg Vornik, CEO of DroneShield, to insurance companiesMESSAGES.com.au there is an opportunity for insurers to fill a gap in protection with new policies and reward policyholders who mitigate this threat.
Extending “counter drone insurance” to an add-on policy represents a significant market opportunity for airports, utilities, enterprise/data centers, stadiums/special events and other sensitive location customers, he says.
“This would reduce the confusion for asset owners and fill the gap in the risk profile of this growing threat,” Vornik said.
“Offering concessions and/or specific add-ons to anti-drone insurance — similar to what insurers have done with cyber insurance — would give insurers a competitive advantage to win new business.”
Prominent examples of disruption from drones include a two-day closure of London’s Gatwick Airport during the busy 2018 holiday season, which will cost an estimated $64.5 million ($94.65 million). The Emirates Authority for Standardization and Metrology has estimated that a drone disruption would cost Dubai International Airport just under US$100,000 (US$146,744) per minute.
Drones have halted flights by flying around airports, colliding with objects and people, and promoting cyberattacks through proximity hacking. Other use cases include violation of broadcasting rights and terrorism.
Drones have evolved into “impressive flying machines,” says Mr. Vornik, with a $2,000 drone from a retail store that can fly up to 10 kilometers, has sophisticated detection-and-avoidance flight capabilities, operates autonomously via GPS coordinates, and all carrying contraband to a jail explosives They also come with high-performance cameras and work in “sophisticated swarms,” Droneshield tells the insurance companyMESSAGES.com.au.
Drones performing cyberattacks 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 of these situations result in a loss for which either the insurer and/or the owner of the asset are responsible.
“While legislation technically prevents people from flying drones near sensitive locations, in practice it happens regularly because people either don’t know the rules, don’t care to follow them, or intentionally break them,” said Vornik.
Most cases go unreported, he says, although recent Australian examples include a surge in drones at Cairns Airport, drones invading Sydney Airport’s airspace and drones spying on rugby players and their families.
“At this point it is unclear how the costs of such disruptions will be managed and whether they will be included in insurance policies. We anticipate that over time organizations will ask to explicitly include drone incidents as a covered point in these guidelines.”
Insurers should consider whether installing an anti-drone system is a requirement for coverage in the same way a fire alarm is for fire insurance, he says, adding that the war in Ukraine is an exceptional example of an “ordinary” person’s ability “ Using a cheap consumer drone for surveillance and attacks.
“This is expected to lead to more drone threats domestically,” he said.