The global drone insurance market could be worth more than $US1 billion ($1.33 billion) by 2020 and $US500 million ($666.79 million) in the US alone, according to Allianz Global Corporate & Specialty (AGCS).

Experts predict 4.7 million unmanned aircraft systems (UAS) will be in operation by then, with their commercial value rising from $US2 billion ($2.66 billion) to $US127 billion ($169.36 billion).

With the expansion will come greater risks, primarily mid-air collisions with other aircraft and loss of control from system failure or flying beyond signal range.

“There have already been enough incidents and near-misses to date involving UAS to generate concern that the likelihood of collisions and other loss events will grow as numbers multiply,” AGCS Aviation Practice Leader James Van Meter said.

He says the primary concern is a lack of consistent standards or regulations around the world for drones’ safe operation.

“In many locations there are few or no pilot training and maintenance standards. In addition to regulation, education will continue to be key to ensuring safe UAS operations.”

Training should include aspects of meteorology, emergency instructions, air traffic law including flight rules over buildings, system maintenance, flight time calculation and on-board camera image use, he says.

AGCS says even a small drone could cause $US10 million ($13.34 million) of damage if it hit an aircraft engine, while a pilot losing control during a building inspection could produce a liability of half that sum. 

Other concerns include terrorists using drones to target critical infrastructure, hackers seizing control or intercepting signals and stealing valuable data, and privacy issues.