Drones and commercial contracts

Key points

• Drone adoption is accelerating across sectors, bringing new commercial opportunities and legal risks
• A robust contractual framework can help organisations realise the benefits of drone technology
• Businesses should review contracts to ensure responsibility for safety, compliance, data and cyber risks is clearly allocated

Commercial context

Drone technology is moving beyond specialist aviation and defence applications and into ordinary commercial operations. Businesses are using drones for surveying, mapping, structural inspections and progress monitoring; for moving goods and supporting logistics networks; and for collecting imagery and data in locations that are difficult, costly or unsafe for people to access. Back in 2022, the UK government anticipated that, by 2030, commercial drones would be commonplace, and that seems increasingly likely today.

With the increased rise in drone usage, drone operators have emerged as another service provider. Businesses are entering into drone services agreements that regulate not only the operation of the drone itself, but also the delivery, ownership, and use of the resulting services and data. There are consequential relationships and implications between businesses and the drone service providers, and between businesses and their wider contractual counterparts and customers/end-users, where drones are used to fulfil obligations and operations.

Practical implications of commercial drone usage: Sector insights

Construction, infrastructure and property

Drones are increasingly being used in construction for land surveying, progress monitoring, quality control, site security, stockpile volumetrics and infrastructure. They can provide up-to-date aerial imagery and data from a fast-changing site, allowing project teams to monitor progress, identify defects and make informed decisions more quickly. At scale, drone surveys may also reduce surveying costs and limit the need for workers to access hazardous or difficult-to-reach areas.

Similarly, drone usage in real estate development and portfolio management more generally can tackle challenges in bird’s eye and panoramic surveys, so it’s particularly useful for inspections of hard-to-reach and hazardous areas. Drone usage also has commercial value for real estate agency, for example, in improving listings and providing a competitive edge with aerial content.

However, all such benefits depend on the reliability, accuracy, and permitted use of the data produced, which should be addressed clearly in the relevant contracts. As should the fact that most construction/real estate drone use will be in built-up and populated areas, which can bring its own risks or restrictions.

Retailers and logistics

Across retail and logistics, drones are being used not only to streamline inventory and warehousing, but also to complete deliveries in minutes rather than hours and to help meet businesses’ environmental and congestion-reduction goals. For example, following a recent drone delivery trial, Amazon is now seeking to expand drone delivery service to the whole of the UK. Businesses can not only reduce costs but increase customer satisfaction with faster delivery times.

Commercial advantages are clear, but a recent investigation into an Amazon drone delivery crash highlights some of the associated risks.

Legal considerations

As explained in our earlier article, drone operations in the UK are regulated principally by the Civil Aviation Act 1982, the Air Navigation Order 2016 (ANO) and the wider Civil Aviation Authority (CAA) unmanned aircraft regime. Operators mustn’t recklessly or negligently endanger persons or property; restrictions apply to drone operations near airports and airfields; and there are operational safety, registration and airspace requirements.

The regulatory framework was updated with effect from 1 January 2026, including revised operator registration requirements, new UK class markings and requirements relating to lighting for night operations. Further changes are due to take effect from 1 January 2028, including equipment and operational requirements  for direct remote identification and geo-awareness systems for certain drones.

Businesses that operate drones, procure drone services or permit drones to be used in delivering contractual obligations should ensure that their arrangements remain compliant with the updated regime.

Drone use may also engage data protection law and relevant Information Commission guidance, particularly where aerial imagery or other data relating to individuals is collected through surveillance.

The Product Security and Telecommunications Infrastructure Act 2022 is also potentially relevant, as many modern commercial drones are internet- or network-connectable consumer products, to which the Act applies.

Compliance with the regulatory regime is fundamental, but an appropriate contractual framework should also address the wider legal and commercial risks. These include (non-exhaustively): safety, insurance, limitation of liability and indemnities, the ownership and use of data and intellectual property, operational matters and confidentiality.

Commercial contract considerations

To achieve the most effective contractual framework for their commercial drone operations, businesses should increasingly ask questions such as:

• Who’s responsible if a survey contains errors or omissions?
• Can the end-user rely on drone outputs for professional or commercial decision-making?
• Are consents required before drones are introduced into existing projects?
• What happens if weather conditions or airspace restrictions prevent performance?
• Who owns the footage, mapping data, or other outputs generated during the project?
• Who’s responsible if property damage or personal injury occurs  because of the drone usage?
• Who bears responsibility for a data breach, privacy complaint, or cybersecurity incident arising from the operation?
• What remedies are available if the service is delivered late or fails altogether?
• Could a failure by the drone or drone operator place the business in breach of another contract?

Anticipating these types of practical issues in the context of the particular business and/or contract in question should help to inform and complement the following contractual considerations:

Scope and performance

The contract should specify the drone services, deliverables, flight locations, timings, technical standards, acceptance criteria and any customer/counterparty/end-user dependencies.

Regulatory compliance

The contract should allocate responsibility for compliance with the applicable drone regulatory regime, including CAA registration, operational authorisations, pilot competency, airspace and local authority restrictions, and any technical or operational requirements applying to the relevant drone. It should also address responsibility for any statutory requirements, planning permissions and consents.

Drone service suppliers should warrant that they and the drones they use comply with all applicable legal and regulatory requirements, that they hold all necessary registrations, permissions, and certifications, and that they will update their operations and equipment as required by regulatory changes.

Safety, risk assessments and responsibility

Drone activities can create substantial exposure to claims for property damage and personal injury.

The contract should address risk assessments, flight planning, operating procedures, emergency arrangements, incident reporting and rights to suspend unsafe operations.

Commercial customers of drone operators should seek indemnities for property damage, personal injury or death, third-party claims, regulatory fines and enforcement costs.

Parties may also wish to clarify who controls the worksite and to allocate authority to stop drone services when safety concerns arise.

As well as regulatory and safety breaches, drone operations can give rise to claims in negligence, nuisance, trespass and product liability.

Insurance

The contract should specify the required insurance. This should be proportionate to the anticipated risks and should include aviation and public liability cover, together with professional indemnity and cyber insurance, where appropriate.

Liability and indemnities

The contract should address liability caps, excluded losses and specific protection for (non-exhaustively) injury, property damage, unlawful flights, regulatory breaches, data breaches and intellectual property infringement.

Data and intellectual property

The contract should specify ownership and permitted use of drone output such as raw footage, photographs, surveys, mapping data, digital twins, reports, AI-generated analysis, and supplier technology.

Data protection, privacy and cybersecurity

The contract should address the parties’ roles under the UK GDPR, data protection impact assessments, retention, security, access controls, encryption, breach notification and controls over incidental surveillance. Parties should also consider the return of data and deletion of records of drone outputs.

Operational matters

The contract should address land and airspace permissions, weather disruption, rescheduling, subcontracting, service levels, force majeure and termination.

Confidentiality

The contract should provide for the protection of sensitive imagery (which might include site layouts, operational information and other infrastructure data) and security arrangements.

Quality standards

The contract should ideally specify agreed quality requirements for drone performance and outputs, particularly in drone service agreements regarding timings, surveying, mapping and inspection.

How we can support your drone use adoption

Our Commercial, Regulatory, and Commercial Dispute Resolution specialists have expertise in advising on technology contracts, including, increasingly, drone services agreements and other contracts and supply chain arrangements across the commercial horizon. We can provide upfront, comprehensive commercial and risk management advice on policies, procedures and contractual arrangements to ensure your drone projects fly!

In particular, we can keep you informed about, and train staff on, the ever-changing technological and regulatory environment, obtain any necessary licences and permits, help you address safety, privacy, and socio-environmental concerns, and implement a robust but flexible contractual framework. If or when any issues do arise, our dispute resolution specialists can also offer straightforward, strategic solutions.

Contact Michael, Luke or Jack for further information and advice about how we can help your business to reap the benefits of this transformative innovation.