Drone Insurance Requirements in NYC: The $2M/$4M Standard

The $2M/$4M Standard

38 RCNY § 24-06 establishes mandatory insurance requirements for any operator applying for an NYPD drone permit. These requirements reflect NYC's density, risk profile, and the potential for significant liability in the most populated city in the United States.

Required Coverage Details

• Per occurrence limit: $2,000,000 minimum
• Aggregate limit: $4,000,000 minimum
• Coverage type: Commercial General Liability (CGL) AND Drone Aviation Liability / UAS coverage
• Additional Insured: City of New York, together with its officials and employees, must be named on a primary and non-contributory basis
• Additional Insured address: 1 Police Plaza, New York, New York, 10038
• Policy form: CGL must be at least as broad as ISO Form CG 00 01; Drone/UAS coverage at least as broad as ISO Form CG 24 50
• Additional Insured endorsements: At least as broad as ISO Forms CG 20 26 and CG 20 37
• Carrier rating: A.M. Best rating of A- / VII or higher (or equivalent S&P, Moody's, or Fitch rating)
• Workers' Compensation: Required where applicable by law, or attestation of exemption

How NYC Compares to Other Jurisdictions

NYC's $2M/$4M insurance requirement is among the highest in the United States for drone operations. For context:

• Many commercial drone clients require $1M per occurrence as a baseline
• NYS Office of General Services requires $1M per occurrence for state property flights
• FAA Part 107 has no federal insurance requirement at all

The elevated NYC standard reflects the city's extreme density, the proximity to critical infrastructure (airports, bridges, tunnels), and the potential severity of drone-related incidents in an urban environment with millions of pedestrians.

What the Coverage Must Include

Per 38 RCNY § 24-06, the insurance policy must cover:

• All owned and non-owned unmanned aircraft operations
• Pre-takeoff, during takeoff, in-flight, during landing, and post-landing phases
• Bodily Injury
• Property Damage
• Personal Injury
• Invasion of Privacy
• Trespass

The coverage must be specifically applicable to operations under the permit and may be obtained through a combination of primary and excess policies.

FAA Insurance Requirements

The FAA does not require insurance under Part 107. However, insurance is effectively mandatory for professional operations because:

• Most clients, property owners, and venues require proof of insurance before granting access
• NYC's NYPD permit requires it as a condition of issuance
• Operating without insurance exposes the operator to unlimited personal liability

Certificate of Insurance (COI)

A COI is the document that proves your insurance coverage to the NYPD. It is not the policy itself but a summary issued by your insurance carrier confirming:

• Policy number and effective dates
• Coverage types and limits
• Additional Insured endorsements
• Carrier name and rating

The COI must be submitted with your NYPD permit application and must be physically present during permitted operations for inspection.

Types of Coverage to Consider

• Aviation/UAS Liability: Third-party bodily injury and property damage — required for NYPD permit
• Hull Coverage: Physical damage to your drone (crash, loss, theft)
• Personal Injury / Privacy: Claims from invasion of privacy or defamation via drone footage
• Errors & Omissions (E&O): Professional liability for incorrect inspection data or faulty deliverables
• Non-Owned Aviation Liability: Coverage when operating rented or borrowed drones

Getting Insured

Drone insurance is available through specialized aviation insurance brokers and some general insurers. When shopping for coverage:

• Confirm the policy meets the specific ISO form requirements in 38 RCNY § 24-06
• Verify the carrier meets the minimum A.M. Best rating of A- / VII
• Request the Additional Insured endorsement for the City of New York before applying for the NYPD permit
• Keep your COI current — an expired COI means an invalid permit