The short answer
A company that builds drones needs products-completed operations coverage on a form that does not exclude aircraft, plus non-owned aviation liability for the customers who fly what it sells. A company that operates a fleet under Part 107 needs aviation liability, typically $1M for small operators and higher when industrial clients ask, and hull coverage on each aircraft it cannot afford to lose. The plain general liability form excludes aircraft, so neither company gets there with a standard policy. The FAA sets no federal insurance requirement for commercial small-drone operations; contracts and some states and cities do.
Why the standard form excludes drones
Standard general liability forms exclude bodily injury and property damage arising out of the ownership, maintenance or use of aircraft, and an unmanned aircraft is an aircraft under that wording. The exclusion predates drones by decades and was written for the company plane. It applies to a 900-gram quadcopter all the same. A drone company holding a plain general liability policy has coverage for the office and the workshop and none for the thing it exists to fly.
That is why drone liability is written on an aviation form, or added by an endorsement that gives aircraft back. The aviation form defines the aircraft it covers, the pilots who may fly them and the operations they may fly, and it carries its own limit, separate from the general liability limit. Hull coverage sits beside it: physical damage to the aircraft itself, whether it crashes, floods a motor or disappears over a treeline.
Pilot-level drone insurance is well served. A single Part 107 pilot can buy a policy online in an afternoon, and the specialist agencies are good at it. The company that builds drones, or runs a fleet of them under Part 107 with employees as pilots, is a different buyer. Its questions are products, fleet, contract limits and the customers who fly its aircraft, and the pilot products were never built to answer them.
Who buys what, and how much
The operator's program starts with aviation liability. $1M per occurrence is typical for small operators, and some industrial clients want $5M for work near critical infrastructure (a drone insurer's limits article, accessed 2026-09-12). Hull coverage follows for each aircraft you would not want to replace out of runway, and workers' compensation covers your pilots and crew. Beyond visual line of sight and delivery operations move the whole program up: the contract asks a higher limit, the carrier asks to see the waiver, and the pilot roster gets read line by line.
The manufacturer's program starts with products-completed operations, on a form that does not exclude aircraft, because a drone that fails in a customer's hands is a products claim. Non-owned aviation liability responds when a customer, a dealer or a demo prospect flies your aircraft and hurts someone, which is the exposure at every trade show and every field trial. Hull on your own test fleet, and aviation liability for your own flight testing, round it out.
The FAA sets no federal insurance requirement for commercial small-drone operations; contracts and some states and cities do (FAA, accessed 2026-09-12). The utility that hires you for a line inspection, the production that hires you for a shot and the city that permits you to fly over its park each write their own requirement, and those are the numbers that govern. A company that builds and operates, the usual shape of a delivery or inspection startup, buys both programs at once.
Who buys what
| Aviation liability | Operator | $1M typical for small operators; some industrial clients want $5M near critical infrastructure |
|---|---|---|
| Hull coverage | Both | The operator's working fleet; the manufacturer's test aircraft |
| Products-completed operations | Manufacturer | On a form that does not exclude aircraft |
| Non-owned aviation liability | Manufacturer | Customers, dealers and demo prospects flying your aircraft |
| Workers' compensation | Both | Pilots, crew and assembly staff |
| Tech E&O | Both | Autonomy software, inspection reports and data deliverables |
| Umbrella | Operator | When the contract asks for more than the aviation limit carries |
What it costs at each level
The published figures are pilot-level. A drone-specialist insurance agency lists $275 to $350 a year for $1M liability-only coverage for a single pilot (accessed 2026-09-12). Another drone insurer lists $750 to $1,500 a year for new commercial pilots (accessed 2026-09-12), and a training school lists $450 to $600 a year (accessed 2026-09-12). The spread comes from what each policy includes and how new the pilot is.
Hull coverage is priced as a percentage of the insured value, and a drone insurance marketplace's cost guide puts it at 8% to 12% of declared value a year (2026-04-05). A $20,000 inspection aircraft therefore carries roughly $1,600 to $2,400 a year in hull premium at that rate. That arithmetic is why small operators insure the aircraft they cannot afford to lose and fly the rest bare.
Company-level programs, with hull on a fleet and products coverage for the manufacturer, sit well above these figures, and we do not publish a number for them. The drivers are the aircraft count and value, the number of pilots and their hours, the operations you fly, the units you have sold and where they fly, and the contract limits you have to certify. A manufacturer with a thousand aircraft in customer hands is priced on the field count before anything else.
Where one policy stops
The operator's policy does not cover the manufacturer's product defect, and the manufacturer's policy does not cover the operator's flight. When a delivery aircraft drops a payload on a car, the operator's aviation liability responds to the injured party first, and the operator's carrier then looks to the manufacturer's products policy if a motor failed. A company that does both needs both, on wording that agrees about which one answers first.
Aviation forms carry conditions the general liability form never had. Flights by pilots not named on the policy or not holding a Part 107 certificate, night operations without the required training, and flights beyond visual line of sight without a waiver are commonly excluded outright. A pilot who steps outside those conditions steps outside the policy, and the claim comes back to the company.
Read the aircraft schedule against the fleet every quarter. Hull covers the aircraft listed, at the value listed, and a fleet that grew from three aircraft to twelve since the policy bound has nine aircraft flying uninsured. The same goes for the pilot roster on a named-pilot form.
How to buy it as a company
Tell us which you are. A manufacturer describes the aircraft, the units sold, the customers who fly them and the test program. An operator describes the fleet with values, the pilots with certificates and hours, the operations flown and the contracts that set the limits. A company that is both describes both, and we place them as one program so the two policies agree about who answers first.
We go to aviation markets that write unmanned aircraft explicitly, ask for the aircraft schedule and the pilot conditions in the quote, and read the exclusions before anything binds. Certificates naming the utility, the venue or the city issue from the placed program, and BVLOS or delivery operations get quoted as their own line item so the higher limit is priced on the operation that needs it.
This page describes coverage in general terms. It is not an offer of insurance, and carrier appetite, policy wording, licensing, and availability govern every quote and every claim.
Common questions
Does the FAA require drone insurance for Part 107 operations?
No. The FAA sets no federal insurance requirement for commercial small-drone operations. The requirements come from contracts, and from some states and cities that condition permits or public-land access on a certificate, so the customer or the permit sets the number.
Why does my general liability policy exclude drones?
Standard general liability forms exclude injury and damage arising from aircraft you own, maintain or use, and an unmanned aircraft is an aircraft under that wording. Drone liability is placed on an aviation form or added by an endorsement that gives aircraft back, with its own limit.
What is drone hull insurance?
Physical damage coverage for the aircraft itself: crashes, water landings, fly-aways and theft, subject to the carrier's wording. It is priced as a percentage of the insured value, and a drone insurance marketplace's cost guide puts it at 8% to 12% of declared value a year (2026-04-05), so most operators schedule the aircraft they cannot afford to replace.
We build drones and sell them. Do we need aviation liability?
You need products-completed operations coverage on a form that does not exclude aircraft, because a failure in a customer's hands is a products claim. You also need non-owned aviation liability for the customers, dealers and demo prospects who fly your aircraft, and aviation liability for your own flight testing.
Our utility customer wants $5M aviation liability. Is that normal?
Often. $1M is typical for small operators, and some industrial clients want $5M for work near critical infrastructure (a drone insurer's limits article, accessed 2026-09-12). The extra usually comes from a higher aviation limit or an umbrella over it, and the carrier will want the pilot roster and the operations described before quoting it.
Does drone insurance cover flights beyond visual line of sight?
Only when the policy says so. Aviation forms commonly exclude flights beyond visual line of sight without a waiver, along with flights by unlicensed pilots and night operations without the required training. BVLOS and delivery operations are quoted as their own line item, with the waiver in the file.
Terms in this guide
Sources
- 01FAA, commercial operators under Part 107, on the absence of a federal insurance requirement, accessed 2026-09-12
- 02A drone-specialist insurance agency, annual pricing for $1M liability-only coverage for a single pilot, accessed 2026-09-12
- 03A drone insurer's article on whether $1M of drone liability is enough, on industrial clients asking $5M near critical infrastructure, accessed 2026-09-12
- 04A drone training school, annual pricing for Part 107 pilot coverage, accessed 2026-09-12
- 05A drone insurance marketplace's cost guide, hull coverage priced at 8% to 12% of declared value per year, 2026-04-05
Read next
- Insurance for robotics companiesThe lines a robotics startup needs before its first customer deployment, with typical contract limits, the segments underwriters treat differently, and where 2026 AI exclusions reach robots.
- Product liability for hardware startupsWhat product liability covers for a company that ships hardware, why policies written for finished goods can exclude prototypes, and what demos, contract manufacturers and enterprise buyers ask you to carry.