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article imageSoaring commercial drone use heightens 'privacy invasion' fears

By James Walker     Sep 6, 2017 in Technology
The surge in commercial drone usage risks the "invasion of privacy" and personal injury, according to a study released today. As the business applications of drones increase, the survey authors say new tailored insurance policies will be needed.
The survey was conducted by Munich Re, the world's leading reinsurer. It looked at the potential risks of drone technology in business. As drones are introduced to enterprises across the globe, risk managers are realising they carry a different set of threats to other forms of technology.
Of the risk managers who responded, 61 percent said they see privacy invasion as the biggest problem associated with drone adoption. Swarms of camera-equipped drones flying overhead could prompt city residents to fear continual surveillance. Inside the workplace, senior staff would be equipped with a new tool to monitor staff.
After privacy, inadequate insurance and the risk of personal injury are the largest concern to risk managers. At 15 percent each, these concerns reflect two of the biggest unresolved issues around drones. Many drones currently fly uninsured or without the correct cover, creating liability risks that commercial users aren't necessarily aware of. Business insurance policies almost universally omit effective drone coverage.
Munich RE called on companies to look at how they deploy drones and take action if required. It also said the insurance industry needs to create compelling products that offer protection for drone users. Increasingly, standardised procedures are required to handle crashes and privacy complaints. Currently, there is no legal baseline to resolve these issues.
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"With the use of commercial drones soaring, it is revolutionizing how many companies conduct and grow their businesses," said Gerry Finley, Senior Vice President, of Casualty Underwriting at Munich Re. "Drones can be used by farmers to monitor fields for pest management, or by an energy company to monitor a solar panel 'farm.' We may even see drones deliver packages for an online retailer on a daily basis. As the use of drone technology continues to evolve, the insurance industry will need to be prepared with innovative products and services to help its customers understand and manage the emerging property and liability risks involved."
According to the U.S. Federal Aviation Administration (FAA), commercial drone sales could reach 2.7 million by 2020. Last year, the FAA introduced new commercial flying rules designed to allow the flight of drones inside U.S. airspace. Operators must have first completed a certification process to demonstrate their expertise and state the reason for their flights. The FAA's rules do little to address the wider business concerns around drone use though.
Despite the lack of protections, the majority of the risk managers surveyed agreed drone adoption will continue to rise. 62 percent said commercial drone operation will be commonplace within the next five years, up from just 37 percent in 2015. Optimism is rising as drones begin to lift off. 7 percent of risk managers already use drones in their business and 46 percent are exploring the technology as a component of a digital strategy.
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