Let the games begin: Wal-Mart has submitted a request to the Federal Aviation Administration that would allow the retail giant to conduct drone delivery “flight tests” over stores, residential areas and distribution centers, according to CNN Money
Analysts believe Wal-Mart is investing in commercial drones with the hopes that it can beat Amazon to the consumer market. While this drone delivery race may ultimately result in new business for the drone insurance industry, Canadian brokers have raised some concerns over its impact domestically.
“I don’t know what kind of impact this will have,” said Don Wales, commercial insurance specialist, Erb and Erb Insurance Brokers Ltd. “Legislation has opened the floodgates and now the industry is just trying to catch up.”
Wales says that Wal-Mart and other companies interested in drone deliveries will require aviation insurance, but since the demand for home delivery is so much greater in the United States, it could be years before Canadian insurers can benefit from commercial drone adoption.
In the meantime, Wales remains apprehensive about new companies entering the drone race, and the effect that this mainstream news coverage could have on Canadian consumers.
“People don’t look at the legalities and liabilities before they go out and buy these things. They just buy them and think they’re good, until they learn they need insurance,” he said. “They’ll call us and realize they can’t cover the operations they’re doing, and the products just aren’t available yet.”
As drones become a focal point in the national dialogue, Wales fears that these phone calls may increase in frequency.
“We get a lot of people who don’t understand, and think it’s our fault that we don’t have a product for them on the personal use side,” he said. “They don’t realize, ‘oh wait – I need insurance, I should probably get some’ but they don’t realize the cost and other factors.”
“It can be frustrating.”