Drones Change the Game; Ready to Manage the Risk?

The global drone industry is booming, expected to surpass $40 billion by 2030. Drones are transforming business operations by improving safety, increasing productivity, and providing competitive advantages across diverse sectors. However, new technology brings new risks; one uninsured accident or regulatory breach can trigger costly legal and reputational damage. As drones power the next wave of operational excellence, leaders must go beyond the hype to manage exposures not covered by traditional insurance. 

Common Uses of Drones

• Manufacturing
  • Drones inspect high-risk areas in plants, such as elevated platforms, confined spaces, and hazardous machinery, transmitting live images so workers don’t need to enter those zones physically.
  • Conduct thermal imaging scans on machinery and production lines to detect overheating or faults, enabling preventive maintenance without exposing staff to high-voltage equipment or moving parts.
• Contracting
  • Perform aerial inspections of rooftops, scaffolding, and unstable structures, reducing falls, and avoiding sending people into structurally unsound areas.
  • Real-time hazard detection from above lets project managers identify risks, such as misplaced materials, electrical hazards, or weak structures, remotely, preventing injuries before workers are exposed.
• Distribution
  • Automate inventory checks and monitor warehouse shelving at heights, preventing employees from having to climb ladders or operate forklifts in congested spaces.
  • Quickly scan for blockages, spills, or dangerous obstructions in large logistics centers, reducing the need for foot patrols in busy loading areas where moving vehicles and equipment present collision risks. 

Risk Management

Drone-related risks include equipment loss, operational liability, regulatory non-compliance, and reputational damage, all with safety, legal, and financial consequences. 

• A single drone incident can subject your business to liability and third-party personal injury due to trespass/invasion of privacy.  
• Uninsured losses to drone equipment may result in unplanned capital outlays, straining both budgets and cash reserves. 
• As regulatory oversight continues to strengthen, demonstrating comprehensive drone insurance is increasingly required to obtain permits and fulfill contract obligations. 
• Adverse media coverage stemming from drone incidents has the potential to erode the trust and confidence of your clients, partners, and key stakeholders. 
• Potential for interfering with a manned aircraft.

Operating without dedicated drone insurance exposes you to considerable risk. A single incident can erase years of hard work and result in complex legal challenges with lasting consequences.

Drone Licensing and Requirements Matter

Whether you’re a general contractor, infrastructure specialist, or maritime operator, drones are transforming job sites and project delivery, from surveying and inspections to real-time logistics. In every application, strict compliance with licensing and operational requirements is mandatory.

Core Requirements for Drone Operations in Michigan

If you operate drones in Michigan, you must comply with both federal and state-level rules. 

• FAA Part 107 Remote Pilot Certificate for all drone operators
• Compliance with Operational Rules under Part 107
• Drone Registration
• Michigan-Specific Compliance - check with municipalities and local authorities for area specific requirements

Act Now to Secure Drone Operations

To ensure drones deliver maximum business value, businesses must actively manage risks, maintain compliance with evolving regulations, and secure comprehensive insurance coverage. 

• Get Licensed – Ensure that all team members operating drones hold valid FAA Part 107 certificates.
• Set Policies – Establish internal SOPs for drone use, safety, and compliance.
• Stay Updated – Track regulatory developments from OFME, MDOT, FAA, and local jurisdictions.
• Integrate Insurance – Work with your insurer to confirm what your coverage includes and excludes for drone operations.

Drones are rapidly transforming industries by delivering safer, faster, and more efficient operations, but to fully capitalize on their potential, businesses must proactively manage risks, stay compliant with evolving regulations, and secure comprehensive insurance coverage. 

Embrace drone technology confidently, but don't wait to secure your drone operations against liability and regulatory risks. Contact Koppinger & Associates today to integrate drone coverage into your risk management strategy.

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