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Industry Insights

Words of wisdom from our business insurance experts.

Drone Light Show Insurance: Costs, Coverage, Quoting Process, and more
4 min read
September 15, 2022
Drone Light Show Insurance: Costs, Coverage, Quoting Process, and more

If you saw the Olympic ceremony in 2020 (peak at the performance below), you may have caught a glimpse into the start of a spectacular industry - drone light shows. Our UAV insurance advisors have been working with some of the key operators since 2015, but it wasn't until recently that these shows have been in mainstream media. Today, operators are using anywhere from 25 to 4,000 drones to create unbelievable experiences for event attendees.

Drone Light Shows are being used across all event categories from sporting events inside arenas to large concerts outdoors. The technology uses custom drones and software to create images in the sky above attendees. They can be as simple as two dimensional words, but the latest technology shows operators creating three dimensional motion characters. Big names like Dave Matthews Band and Burning Man are using them with top visual artist like Drift Studios.

Similar to a firework show, attendees are protected during the show and away from the drones in case there is a malfunction. Or at least per the FAA regulations, they should be. That said, there is still a lot of risk involved with these shows and drone light show insurance is important.

Our analysts predict drone light shows becoming a standard feature at most events as the technology develops.  As the technology gets better and more creative, it makes sense for drone light shows to be present at most large scale event. In addition, as more states and cities ban fireworks due to fire hazards, local organizations will implement drone light shows as a firework alternative. This is a real thing - fireworks were banned in multiple states in 2022 due to fire hazards.

What risks do drone light shows have?

From 2015 to 2021, there we over 4,250 injuries related to drone accidents - most injuries due to head trauma or lacerations, with most accidents occurring from drones falling into people.

Unmanned Aviation Vehicles (UAV's for short) are controlled by remotely by operator(s) using hardware and software that can malfunction. The technology typically sets a geo-fence around the performance area to prevent attendees from being hit by a faulty drone. In some scenarios, if you are close to the drone it can still fall and hit a bystander, especially if the drone light show is using a large number of drones (check out the Guiness Book of World Record set with over 3,000 drones).

Depending on where the drones are operated, the weather can also increase the risk of a loss. If a storm suddenly appears and a gust of wind hits, you can assume the lightweight drones may move out of their flight path.

Battery life is also a common risk that can be overlooked by operators. Drone light shows can use hundreds of units, so there's a considerable number of batteries to maintain. A 1 pound drone falling from 350 feet can do a lot of damage to a person or thing.

The FAA has implemented a list of requirements for drone operators that utilize the drone light show technology to prevent losses from happening. Learn more about the Part 107 Night Waiver at the link here - below are some of the key regulations:

  • Operators must have 3 miles of visibility
  • Drones are limited to 400 feet above ground level
  • There must be a restricted area underneath the show and away from bystanders

What insurance does a drone light show business need?

Drone light shows have some very obvious lines of coverage, such a property insurance and aviation liability, but they also have some coverages that are often overlooked. Most operators don't start thinking about insurance until they have a contract with a partner, venue, lease, or other contract. If your business is doing a show with a large concert or festival, the organizer may not allow the deal to finalize without proof of insurance.

As a drone light show business grows, more insurance may be necessary. From coverage protecting the attendees and physical drones, to insurance for employees, investors, and partners -- an insurance policy is a great way to protect the people, property, and assets of an organization.

Below are the most common type of insurance for a drone light show business -

Commercial General Liability:

  • What is it? Covers third party bodily injury and property damage (a customer slips and falls in your office or warehouse)
  • What limits? $1mil Per Occurrence, $2mil Aggregate

Aviation Liability:

  • What is it? Similar to CGL, it covers bodily injury and property damage (from a drone hitting a person or thing)
  • What limits? $2mil+ (many venues require $5mil)

Commercial Property:

  • What is it? Covers business property, such as inventory, computers, furniture, equipment, and other valuable items used for the business.
  • What limits? Replacement Value

Workers Compensation:

  • What is it? Covers injury to people working for the business (an employee or contractor slips and fall and needs medical attention)
  • What limits? $1mil Bodily Injury, Disease, and Death

Cyber Liability & Data Breach:

  • What is it? Protects business if it is attacked by hackers, malware, wire fraud, social engineering, and other cyber crimes.
  • What limits? $2mil Per Occurrence

Management Liability (D&O, EPLI, etc.)

  • What is it? A package of insurance including Directors & Officers Insurance, Employment Practices Liability, Fiduciary Liability, and Commercial Crime Insurance.
  • What limits? $1mil Per Occurrence at minimum

Other Key Coverage:

Product Liability, Manufacturing Errors & Omissions, Commercial Automobile, Key Man Insurance, Group Health, Disability, and Inland Marine.

How much does insurance cost for a drone light show operation?

The cost of insurance depends on multiple factors for each type of coverage. For example, an Aviation Liability policy is rated from the number of drones and projected number of shows. A company working with 50 drones doing 20 show a year may pay $25,000 for Aviation Insurance. On the other hand, an operation with 1000+ drones doing 100 shows a year can pay up to $250,000 per year. If you increase the limit of liability, then the pricing can increase an additional 20% - 30%.

The best way to understand pricing for each policy is to work with an experienced insurance advisor. Our Aviation Insurance Advisors will analyze your business, provide recommendations, and quick ballpark pricing per line of insurance.

What is the process like to get insurance quotes?

The process is simple - connect with an advisor, provide underwriting details, and give us a day or two to engage insurers. Your advisor will negotiate the best coverage, with the best insurance providers, at the lowest price.

Schedule a meeting today (click here)

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Tyler Crawford
by Tyler Crawford
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