Only a little while ago, getting liability insurance for your drone flights was a massive headache. Few insurance companies offering coverage, and those that did charging massive premiums. That has now changed; anyone can obtain drone liability insurance instantly online or through an app thanks to on-demand drone liability insurance. People were skeptical of the concept at first, but over time it has become the norm.
If you are a single drone pilot doing freelance work, on-demand drone insurance from SkyWatch.ai or Verifly, which is owned by Thimble, is almost certainly is the best option for you. And in my opinion, SkyWatch is potentially cost-effective for full-time drone pilots or small companies as well, offering monthly and annual plans, as well as bundles that include general business liability. That said, for a drone program inside of a large established company or a very large drone provider, bundling drone liability insurance with the rest of your business insurance may still be the best all-around deal, and will eliminate the difficulty of potentially having to report an incident to two different insurance companies.
SkWatch Versus Verifly
As you probably already know, SkyWatch and Verifly are the two most popular on-demand hourly drone insurance apps. SkyWatch also offers affordable monthly and annual insurance through the app or their website as well as hull insurance, which covers repairs or replacing your drone in the event of a crash.
What are the insurance policy differences?
The insurance coverage from SkyWatch and Verifly are relatively similar, covering everything the average drone provider needs. Both include property damage, bodily injury and personal injury to other people. SkyWatch also includes $500 of personal medical expense coverage. Make sure to thoroughly read the insurance policy and the FAQs page to make sure your type of operation is covered.
SkyWatch offers liability insurance from $500,000 to $5 million in-app, and Verifly offers liability insurance from $1 million to $10 million. SkyWatch does offer $10 million of insurance coverage if you contact them directly. Both have a base price of $10 for $1 million in coverage for one hour. Hourly premiums change depending on location, size of selected flight area, coverage amount and other factors.
Here are a few of the notable differences I ran across, as of March 2020:
Verifly only covers drones under 35 lbs., and you must manually set the weight class, which changes your premium. SkyWatch covers all drones under 55 lbs, with no change to the premium.
Verifly limits “invasion of privacy coverage” to $10,000, whereas SkyWatch has a combined limit equal to your selected policy amount for bodily injury, property damage and personal injury. "Personal injury" includes invasion of privacy.
SkyWatch offers hull insurance for drones and under certain circumstances other drone-related equipment on their monthly and annual plans (but not hourly plans). Verifly does not offer hull insurance.
Filing a liability claim does not affect your insurance premium (or presumably your insurability) in Verifly. In SkyWatch, your safe flying and “insurance flight experience” discounts are reset to zero and have to be re-earned, but other than that you are good.
SkyWatch allows another person to fly your drone under your insurance coverage (you probably need to be present though) so long as they are listed as an additional insured. Verifly does NOT allow another person to be covered under your insurance while flying. Only the pilot who originally purchased the policy can fly, although you can still list additional insured.
Verifly allows indoor flying for any legal purpose, so long as you select it in the options panel when purchasing insurance, which raises your premium slightly. SkyWatch only covers indoor drone racing and drone pilot training, and this is only on its hourly insurance plans (but not monthly or annual) and your premium doubles. So not super useful for commercial pilots who need to fly indoors constantly.
SkyWatch allows Beyond visual line of sight (BVLOS), assuming you have a waiver. This works better with the monthly or annual plans since you are limited to the selected flight area on hourly plans. Verifly is vague on BVLOS, stating that it limits flight to within 2 miles of the pilot, therefore “effectively ensuring that your drone is within VLOS”.
Verifly and SkyWatch both insure nighttime flights, however, your hourly premium will increase and you need a Daylight Waiver (obviously!). SkyWatch’s monthly and annual flights always cover nighttime flights with no premium increase.
Both platforms will insure autonomous flights, but it does not void your responsibilities as a pilot, and you cannot go outside of the defined coverage area on hourly plans.
Verifly offers drone liability coverage in all 50 states. SkyWatch is available in the US, Canada, and the UK, but in the US, coverage is not provided in New York State. And currently, residents of Kentucky must contact SkyWatch directly, though that should change very soon. Neither offers insurance in Washington, DC.
Both Verifly and SkyWatch will cover you if you unintentionally violate FAA rules, but you have to prove that it was unintentional; Misconduct or criminal activity will void your coverage.
These are some of the liability policy differences. If you know of any others, please leave them in the comments below! As always, make sure to read your insurance policy thoroughly.
How are they priced?
Okay, so which is a better deal? Pricing matters to small companies and freelancers. Under most circumstances, even without factoring in discounts, SkyWatch is cheaper and has a simpler interface to navigate. Here are a few comparisons between their hourly plans.
Verifly and SkyWatch both offer a base price of $1,000,000 liability insurance for $10 an hour. But once you start increasing the coverage, change the location of the flight, or one of the many other options, the premium increases in surprising ways.
Verifly’s options panel is more complex than SkyWatch’s, which may be a good thing or a bad thing depending on how you look at it! One thing to note is that flying indoors through Verifly tends to be cheaper than SkyWatch, and you are allowed to perform a much wider variety of operations.
Verifly charges quite a bit extra (frequently more than double) for being near any airport, including tiny private grass strips like this one near my business. If I was to move the flight area to be just outside that yellow zone, the cost drops down to $10.
SkyWatch only charges you extra for being close to truly busy airports. But if your flight area crosses major roads (mainly federal interstates) your hourly rate will go up. That said, you can easily draw your flight path to avoid the road altogether, assuming you aren't potentially going over it.
Once you start changing options beyond the base price, those monthly and annual plans start looking attractive! This same level of insurance coverage would cost only $208 in a monthly plan, for a savings of $121 over the Verifly price. If we weren't close to the "airport" (a grass strip with no lights) the Verifly price would be $150. Still, if you fly more than a couple of times, the monthly plan will save you money.
One premium variant that isn’t always noticeable is flying after dusk. Both SkyWatch and Verifly charge more for hourly rates at night. Ultimately, both plans are similarly priced for "simple" flights, but your premium can increase in surprising ways depending on circumstances and where you are flying.
One last screenshot: Who would even consider paying this much?
This would obviously be a large scale commercial operation (potentially BVLOS), but I cannot see even a large corporation coughing up that much cash to fly a single drone for 8 hours. These are the sorts of operations where annual plans come into play.
How are SkyWatch monthly and annual plans priced?
SkyWatch’s monthly and annual liability plans are even more straightforward than the hourly plans. The only limitation compared to hourly (that I am aware of) is that indoor flights are not covered under any circumstances. But it covers flying near airports and flying at night, assuming you are doing so legally. My favorite part of these plans is that you don't have to worry about going outside of the designated zone.
$1 million liability limit costs $62 a month, or $750 a year.
$500,000 liability limit costs $42 a month or $500 a year.
$5 million liability limit costs $208 a month or $2500 a year.
These figures do NOT factor in discounts. I currently have a 28% discount, so $1 million liability insurance only costs $44.64 a month. If you do plan to buy an annual plan through SkyWatch, I would recommend starting with a monthly plan first until you have accumulated some “insurance flight experience” hours, in order to get that discount.
Interestingly, annual insurance sometimes costs a tiny bit more than paying monthly, as SkyWatch seems to have picked “round” numbers. For example, $62 x 12 equals $744, so you pay $6 more for an annual plan with a 1 million liability limit. For 500,000 in insurance, $42 x 12 is $504, so you do save $4 there. This is a negligible difference, but it is interesting to note.
Verifly does not offer monthly or annual plans, nor do they appear to have any plans to do so in the near future. If you want an annual insurance plan, Verifly suggests that you see your "insurance broker to explore these options"
(from Thimble Verifly FAQS as of April 11th. 2020)
SkyWatch Discounts: It really adds up.
SkyWatch offers two different ways to earn discounts on insurance: a “safe flying score” that is created by uploading your flight logs to SkyWatch or flying with the app itself, and “insurance flight experience” discounts which accumulate as you purchase insurance multiple times. You earn 1 hour per hour-long flight, and you earn 3 hours per month-long insurance plan. In total, your insurance rate can drop as much as 30% due to your safe flying score, and up to 25% for flight experience, up to a maximum of 50% combined discount. This discount really adds up. You can save up to $375 on an annual $1 million liability plan, or only $5 for an hour's protection.
If you want a video showing the process of uploading your flightlogs to SkyWatch, please let me know in the comments section below.
At this point, Verifly does not offer any discounts like SkyWatch, but are promising to change that in the future.
SkyWatch also offers hull insurance for their monthly and annual plans “Our hull coverage includes deductibles at a 14% rate of the declared value per item” (This would mean you would get a refund of $860 to replace a $1000 drone.)
Monthly premiums are essentially 1/12 of 14% the value of the item annually, and 8% if paid with an annual plan. This would mean you would pay $11.67 a month ($140 a year) on a our $1,000 drone if paid monthly, and a flat $80 if paid annually.
If you are just getting started in the business, SkyWatch's parent company, Starr Insurance Companies, actually offers other insurance plans and will create a custom bundle that includes general business liability, and good rates for larger drone fleets. Despite some limitations regarding indoor flying, SkyWatch seems to be a much more business-friendly Drone insurance provider and can grow as your business grows.
Conclusion, which one should you use?
To be honest, I am biased towards SkyWatch, but it didn't start out that way> I originally used Verifly, and only changed to Skywatch after careful comparison.
In summary, SkyWatch seems to be the best option except for indoor flying, where Verifly is clearly better, as well as for residents of New York State. In the future, this may change if Verifly creates a discount program and monthly/annual policies, but until then SkyWatch is the most straightforward, flexible and cost effective insurance solution for commercial drone pilots.