With a few taps on your smartphone, you order a pizza. Within minutes, there is a buzzing outside your door, which you open to reveal a hovering drone gently depositing your steaming hot dinner.

It’s not science fiction; in fact, the technology exists to make this scenario entirely feasible. Last year, Google used drones to deliver small items, like first aid kits and dog food, to farmers in remote parts of Queensland. And retailing giant Amazon plans to offer 30-minute delivery via drones.

The rise of drones outside the military is being driven by technological breakthroughs, says Australian UAV Director James Rennie. “Things really started to move forward for civilian use of unmanned aerials vehicles (UAVs) about two years ago,” he says. “UAVs co-opted mobile phone technology such as the compass, batteries and GPS – since then the number of businesses operating or selling UAVs has exploded.”

Drones breakout

Since their very first incarnation more than 150 years ago, UAVs had been almost exclusively a military technology. Today, they are being used for purposes as diverse as wildlife inventories, chasing criminals, search and rescue operations as well as spraying crops, photographing music festivals or weddings and filming movies, with new applications consistently emerging.

Risky skies

A recent Allianz Global and Corporate Specialty (AGCS) white paper identified third party damage and injury as the key risks for UAV operators.

“AGCS sees a potential risk in the loss of control due to frequency interference, as there have been incidents in the past with radio control models, including fatalities,” the white paper states. “A concern for insurers is the lack of data with regard to operation and loss in the UAV universe. Annual utilisation, number of accidents and repair costs are not readily available. Yet these are key underwriting points for most aviation risks.”

Brooklyn Underwriting has recently launched a UAV product, covering liability, the UAV itself and its payload. General Manager David Porteous says the product is a direct response to skyrocketing levels of use, a trend he predicts will continue.

“We’re also seeing the values of these machines and their ‘payload’ increase over time,” he says. As the aeronautical capabilities of these craft increase – their take-off thrust, carrying capacity and flight capabilities – so too will the values of the items attached to these machines. Expensive camera and geographic monitoring equipment is a prime example.”

Forest fires present particular challenges…It often takes us weeks to get in there, but we were able to rapidly get a UAV in those places to take aerial shots, so it helped us enormously.

QBE’s Simon Hooper underwrites UAVs and says the fact they share airspace with other aircraft means collision is the highest risk. “There have been a number of near misses over recent years that have been the subject of Transport Safety Bureau reports,” he says.

Taking cover

Australian UAV’s James Rennie concedes that there are significant perils in the sky, and not just from other aircraft. “Wedge-tailed eagles tend to think it is another bird and our UAVs are normally a bit smaller so when they attack it, they usually destroy it,” Rennie says.

Eyes on high

While Rennie has third party and public liability insurance, he has been unable to get his insurance on his UAVs. “There are a very high proportion of people operating UAVs without insurance, because as it stands they are just perceived as too high risk,” he says.

Not only are many drone operators underinsured, their numbers are rapidly growing. By law, operators using drones for commercial purposes are required to be approved by the Civil Aviation Safety Authority (CASA). Last year, the number of approved operators tripled to almost 200, although the number of operators actually using drones commercially is estimated to be up to five times higher.

CASA certification also serves to make insurance vastly easier, with Austbrokers ABS Aviation having negotiated an insurance facility for CASA-certified operators. The policy covers public liability and hull for all types of UAVs and any equipment used with the vehicle.