Insurers should consider offering a dedicated policy meeting direct costs from drone disruptions, particularly for venues and firms that take measures to minimise the threat, ASX-listed DroneShield says.

Drones can disrupt airports, stadium events and power generation, or be used to carry out cyberattacks, yet insurance policies are generally unclear on this threat – much like how cyber was formerly treated.

DroneShield CEO Oleg Vornik tells insuranceNEWS.com.au there is an opportunity for insurers to address a protection gap with new policies, and also to reward policyholders that mitigate this threat.

Expanding “counter-drone insurance” into an add-on policy represents a meaningful market opportunity for airport, utilities, corporate/data centres, stadiums/special events, and other sensitive location customers, he says.

"This would reduce ambiguity for asset owners and close the gap in risk profile from this rising threat,” Mr Vornik said.

“Offering concessions and/or specific counter-drone insurance add-ons – similar to what insurers have done with cyber insurance – would give insurers a competitive differentiator to win new business.”

High-profile examples of drone interruption include a two-day shut down of London’s Gatwick Airport during the busy 2018 Christmas period which was estimated to cost $US64.5 million ($94.65 million). The Emirates Authority for Standardisation and Metrology has estimated a drone disruption would cost Dubai International Airport just under $US100,000 ($146,744) each minute.

Drones have halted flights by flying around airports, crashed into objects and people, and fostered cyberattacks via proximity hacking. Infringement on media broadcasting rights and terrorism are other use cases.

Drones have evolved into "formidable flying machines,” Mr Vornik says, with a $2000 drone from a retail store able to fly up to 10 kilometres, have sophisticated sense-and-avoid flight features, operate autonomously via GPS coordinates, and carry anything from contraband to a prison to explosives. They also come with high-power cameras, and work in “sophisticated swarms,” Droneshield tells insuranceNEWS.com.au.

Drones conducting cyber attacks mimick a Wi-Fi network to steal data, hijack Bluetooth peripherals, perform keylogging operations to steal sensitive passwords, and compromise access points, unsecured networks and devices.

All these situations create a loss, which becomes the responsibility of either the insurer and/or asset owner.

“While technically legislation stops people flying drones close to sensitive locations, in practice it’s a regular occurrence, due to people either not knowing the rules, not caring to follow them, or deliberately breaking them,” Mr Vornik said.

Most cases go unreported, he says, though recent Australian examples include a spike in drones at Cairns airport, drones entering Sydney Airport airspace, and drones spying on rugby players and their families.

“At this stage, it’s unclear how the costs of such disruptions are managed, and whether they are included in insurance policies. We expect that over time, organisations will request to explicitly include drone incidents as a covered item in these policies.”

Insurers should consider whether installation of a counter-drone system is a pre-requisite to cover in the same vein as a fire alarm is for fire insurance, he says, adding the war in Ukrainian is an extraordinary example of the ability of an “ordinary person” to use a cheap consumer drone to conduct surveillance and attacks.

"This is expected to translate into more drone threats domestically,” he said.