26 February 2014

LMA contributes to European Commission study into Remote Piloted Aircraft Systems

The Lloyd’s Market Association (LMA), working with other industry groups, has been providing input into a new European Commission study looking into the third party liability and insurance requirements relating to Remote Piloted Aircraft Systems (RPAS) – more commonly known as drones.

RPAS are an emerging technology, the full commercial potential and possibilities of which are only now beginning to be explored. These aircrafts’ ability to cover large areas and difficult terrains makes them ideal for tasks such as inspecting remote oil and gas pipelines and checking overhead power lines. The online retail giant Amazon has gone so far as to speculate that RPAS could be used as personalised delivery systems, flying packages of books and DVDs to customers’ homes. Amazon said in December that its Octocopter drones could deliver packages weighing up to 2.3kg to customers within 30 minutes of them placing an order.

The initial debate around drones focussed on whether or not the current legislative framework is appropriate for this new breed of aircraft. The general consensus was that new legislation would be necessary.

Neil Smith, the LMA’s head of underwriting, said: “Many of the existing liability regimes are based on aircraft weight, or passengers. This would be wholly incompatible with RPAS due to their much smaller size. The size of these craft also means that new legislation could have a negative impact on the leisure radio-controlled model aircraft sector.

The LMA has suggested that it is important to have an industry-wide definition of what constitutes an RPAS and ensure that the definition excludes the leisure market. Due to the significant hazard, loss and third party risk potential posed by an RPAS, it also suggested that proper licencing for operators and pilots would be appropriate, as well as introducing a system to identify the RPAS with its operator so that, should an incident occur, it will be possible to trace the origin of the drone.

Another recommendation is that each RPAS is fitted with a unique identifier/transponder unit in order to make it visible to air traffic control systems and identifiable. There may also be the need for a scheme for events where an RPAS operator is uninsured.

The study aims to consider all current and future risks associated with the RPAS market so that appropriate regulation can be implemented. Preliminary findings are due to be issued in March.

- ENDS -

Notes to Editors

For further information please contact:

James Milne, Communications Manager
Lloyd’s Market Association
T 0207 327 8405

Adrian Beeby
T 020 7623 2368

Rob Gillies, Director, Market Processes
Lloyd’s Market Association
T 0207 327 8377

Julie Lynch
Xchanging Ins-sure Services
T 020 3604 5010

About The Lloyd’s Market Association (LMA)

Formed in 2001 and located in the heart of the Lloyd’s Building in the City of London, the Lloyd's Market Association represents the interests of the Lloyd’s underwriting community. All underwriting businesses at Lloyd’s are members, together managing gross premium income of around £26 billion per annum.