Product structure from IRDAI to give wings to drone insurance

Customised insurance covers for drones are likely to hit the market soon with the Insurance Regulatory and Development Authority of India (IRDAI) unveiling a product structure for such policies and urging insurers to respond to the new and quickly growing market.

Considering the unique characteristics of drones that differentiate them from other aircraft and taking into account the phenomenal growth in the usage of drones for multiple purposes, there is a need to augment the current insurance availability customised to the requirement of drone owners and operators, the regulator said. It said while citing how only a few general insurers in India currently offered insurance cover for Remotely Piloted Aircraft System (RPAS)/drones through existing products under Aviation insurance.

A circular on the product structure for insurance of RPAS/drones from IRDAI said all general insurers (other than standalone health and specialised insurers) are encouraged to file the product as per filing guidelines. Alternatively, the insurers may design and develop their own product, in tune with the minimum coverage specified under the product structure.

“The filing may be carried out at the earliest to respond to the new and quickly growing market,” IRDAI chief general manager (Non-Life) Yegnapriya Bharath said in the circular. A working group of IRDAI had last year developed a model product for drone insurance.

Any such product ought to necessarily offer third party insurance covering the liability that may arise on account of any mishap involving drones and causing death or bodily injury to any person or damage to property, the circular said.

The regulator said the objective behind announcing the product structure is to encourage general insurers come with insurance covers for drones and to facilitate flexibility and innovation in the development of insurance coverage for evolving technology requirements. From legal liability to third-party; physical damage to drone body/hull; personal accident cover for operator; medical expenses cover to operator; to optional covers that will enhance the coverage, the product structure unveiled by IRDAI covers various aspects.

Source: The Hindu