Research on the Definition of Low‑Altitude Accident Liability, Innovation of Insurance Products and Construction Path of Risk‑Sharing Mechanism
Compiled by: BUCKHOUSE Intelligent Technology (Suzhou) Co., Ltd., BUCKHOUSE Research Institute of Low‑Altitude Economy, BUCKHOUSE Global Low‑Altitude Economy Industry Network, BUCKHOUSE China Low‑Altitude Economy Industry Network, BUCKHOUSE International Low‑Altitude Economic Cooperation Network, BUCKHOUSE Low‑Altitude Manufacturing Platform, BUCKHOUSE Low‑Altitude Flight Platform, BUCKHOUSE Low‑Altitude Support Platform, BUCKHOUSE Low‑Altitude Infrastructure Platform, BUCKHOUSE Low‑Altitude Industry Supporting Platform, BUCKHOUSE Low‑Altitude Cross‑border Integration Platform
Completion Date: August 2026
Abstract
As China’s low‑altitude economy enters a phase of large‑scale commercial application, scenarios including unmanned aerial vehicles (UAVs), electric vertical take‑off and landing (eVTOL) aircraft, low‑altitude manned commuting, urban air logistics, agricultural and forest plant protection, and emergency inspection are expanding rapidly. The number of low‑altitude flights and aircraft ownership keeps rising, accompanied by growing safety incidents such as low‑altitude collisions, crashes, equipment failures and safety accidents triggered by network link malfunctions. Low‑altitude accidents are characterized by complex risk sources, multiple involved parties, intertwined causal chains and ambiguous loss boundaries. Difficulties in liability determination, claim settlement, as well as excessive concentration of risk losses on individual market entities have become key bottlenecks restricting the high‑quality development of the low‑altitude industry.
Based on China’s current laws and regulations, low‑altitude pilot practices and domestic‑overseas industry cases, this report systematically analyzes the logic for defining multi‑party liability for low‑altitude accidents, sorts out existing shortcomings in the supply of low‑altitude insurance products, and puts forward implementable mechanism‑building paths centering on the implementation of compulsory insurance systems, innovation of scenario‑based insurance products and establishment of multi‑level risk‑sharing systems. It clarifies liability‑attribution principles under different accident‑inducing factors including product defects, human errors, airspace environment issues, cybersecurity risks and infrastructure failures, by distinguishing rights and obligations of manufacturers, operators, regulators and financial institutions. It further analyzes practical contradictions such as insufficient supply of existing low‑altitude insurance products, lack of data support for rate pricing and inadequate underwriting capacity for high‑risk scenarios. A full‑chain risk‑sharing framework of “legal liability definition‑insurance risk transfer‑co‑insurance dispersion‑fund back‑up‑social coordination” is constructed, providing theoretical references and practical guidance for policy formulation, industry supervision, enterprise compliance operation and insurance institutions’ product R&D.
Keywords: Low‑altitude Accidents; Liability Definition; Low‑Altitude Insurance; Product Innovation; Risk Sharing; eVTOL; Unmanned Aerial Vehicles
1. Introduction
1.1 Research Background
As an important component of new‑quality productive forces, the low‑altitude economy has become a national strategic emerging industry. Low‑altitude airspace reform pilots are carried out across China, and low‑altitude airspace is gradually opening up. Application scenarios have expanded from general aviation to urban air mobility, low‑altitude cultural tourism, instant logistics, power grid inspection, agricultural‑forest operations and emergency rescue. According to industry statistics, the ownership of civil unmanned aerial vehicles in China maintains rapid growth. The number of agricultural UAVs alone has exceeded 300,000, covering more than 3 billion mu of operating area annually. Urban logistics delivery has accumulated over 2.4 million flight sorties in the Guangdong‑Hong Kong‑Macao Greater Bay Area and other regions. eVTOL manned aircraft have obtained type certificates, and urban air commuting is shifting from technical verification to commercial pilot operation.
Along with rapid industrial expansion, safety risks are amplifying. Incidents including mid‑air aircraft collisions, crashes causing personal injuries and ground property damage, interference with civil aviation routes, and loss of control caused by data link attacks occur from time to time.
Different from road traffic and conventional civil aviation transportation, low‑altitude operations involve aircraft R&D manufacturers, component suppliers, operation service providers, UAV pilots, platform dispatching organizations, airspace management authorities, low‑altitude infrastructure operators and communication network service providers. Once an accident occurs, multiple inducing factors such as product quality flaws, human operational errors, environmental interference, infrastructure failures and cybersecurity hazards often interweave. Such multi‑factor coupling brings practical difficulties including accident traceability, liability segmentation and civil compensation implementation.
At the institutional level, the National Development and Reform Commission, State Administration of Financial Supervision and Administration and Civil Aviation Administration of China jointly issued the Opinions on Promoting the High‑Quality Development of Low‑Altitude Insurance. It clarifies that a compulsory liability insurance system for unmanned aerial vehicles shall be initially established by 2027, and a basic low‑altitude insurance policy framework shall be formed by 2030. Insurance mechanisms shall be incorporated into low‑altitude safety governance, and insurance status shall be taken as a pre‑review condition for flight approval, providing top‑level policy guidance for socialized transfer of accident risks.
Nevertheless, a unified and complete set of rules for low‑altitude accident liability determination is yet to be formulated in China. Rules for liability attribution, appraisal procedures and loss assessment standards remain incomplete. Insurance products are poorly matched with risks of segmented scenarios, and mature underwriting solutions are lacking for high‑risk scenarios such as manned eVTOL and high‑density urban flights. Risk losses are mostly borne solely by operating enterprises, with few multi‑level risk dispersion channels. This dampens innovation willingness of industrial entities, and many small‑and‑medium‑sized enterprises face the dilemma of “daring not to fly for fear of crashes, and bankruptcy once accidents happen”. Against this backdrop, clarifying liability boundaries for low‑altitude accidents, promoting iterative innovation of low‑altitude insurance products and building a multi‑party collaborative risk‑sharing mechanism constitute realistic requirements for safeguarding low‑altitude safety, as well as an institutional foundation for the sustainable development of the low‑altitude economy.
1.2 Research Significance
Theoretically, current domestic academic researches mainly focus on airspace management, airworthiness certification and technical routes. Systematic studies on multi‑party liability division, insurance product systems and risk‑sharing mechanisms for low‑altitude accidents remain insufficient. Combining the Civil Code, Civil Aviation Law of the People’s Republic of China and Interim Regulations on the Administration of Unmanned Aerial Vehicle Flights, this report conducts liability‑attribution analysis for different accident‑inducing factors, improves the theoretical framework of low‑altitude tort liability, and enriches research contents on risk governance for emerging industries.
Practically: first, it provides references for regulatory authorities to improve accident disposal rules, implement compulsory liability insurance systems and issue accident appraisal guidelines, promoting standardization of liability determination procedures. Second, it helps low‑altitude manufacturers and operators clarify compliance boundaries, improve internal safety management, risk prevention and control, as well as insurance‑purchase schemes, so as to reduce legal risks in operation. Third, it delivers industrial‑perspective support for insurance institutions to develop low‑altitude insurance products adapted to segmented scenarios and optimize risk pricing models. Fourth, it constructs a risk‑sharing path coordinated by government, industry, insurance and re‑insurance sectors, avoiding bearing of huge accident losses by single market entities. It safeguards the survival of market participants, protects legitimate rights and interests of injured third parties, and balances the dual goals of industrial innovative development and public safety guarantee.
1.3 Research Methodology and Framework
This report adopts literature research, case analysis and comparative research. Literature research sorts out current legal provisions, national and local low‑altitude policy documents and public industry reports. Case analysis draws on practices of Chongqing low‑altitude economy co‑insurance pool, UAV accident judicial cases across China and foreign UAM risk‑governance experience. Comparative research distinguishes liability and insurance demands among low‑risk agricultural‑forest inspection, medium‑risk commercial operation and high‑risk manned flight scenarios.
This report consists of six chapters. Chapter One is the introduction. Chapter Two sorts out major types and risk sources of low‑altitude accidents, and analyzes existing difficulties in accident disposal and liability definition. Chapter Three systematically interprets the framework for defining multi‑party liability and liability‑attribution principles under different accident triggers. Chapter Four analyzes the current situation of China’s low‑altitude insurance market and underlying constraints for product innovation. Chapter Five puts forward complete construction paths covering pre‑positioned liability definition, insurance product system innovation and multi‑level risk‑sharing mechanism. Chapter Six proposes supporting measures and industry prospects.
2. Risk Characteristics of Low‑Altitude Accidents and Practical Dilemmas in Liability Definition
2.1 Major Types and Risk Sources of Low‑Altitude Accidents
In terms of damage consequences, low‑altitude accidents fall into four categories: personal injury, ground property damage, mid‑air aircraft collision damage, and public order disturbance. In terms of risk sources, they are divided into product‑technical risks, human‑operation risks, operational environmental risks, as well as infrastructure and cybersecurity risks.
First, product and technical defect risks. These include aircraft design flaws, power‑system failures, flight‑control algorithm vulnerabilities, battery thermal runaway and component malfunctions. eVTOL multi‑rotor distributed power systems feature high complexity; algorithm failures and sensor failures may directly lead to out‑of‑control crashes. Given scattered component supply chains covering batteries, motors and navigation modules, it poses great difficulties to distinguish liabilities between original‑equipment manufacturers and component suppliers after accidents.
Second, human‑operation and operation‑management risks. These include pilot misoperation, unauthorized flights beyond permitted airspace, defective enterprise safety management systems, inadequate pre‑flight inspection and insufficient training. In training scenarios, liability for trainees’ violation‑caused accidents shall rest with training institutions. In commercial operation scenarios, operators shall be liable for scheduling errors, overload flights and intrusion into restricted airspace. For private‑modified aircraft operated by hobbyists, liabilities shall be borne by individual users.
Third, external operational environmental risks. GNSS signal shielding by high‑rise buildings in urban areas, extreme gales, thunderstorms and bird strikes belong to external environmental triggers. External environments do not automatically exempt relevant entities from liabilities. Judgement shall be made comprehensively based on whether enterprises conduct meteorological risk assessment, formulate contingency plans and avoid high‑risk airspace.
Fourth, infrastructure and communication‑network security risks. These include vertical take‑off and landing site malfunctions, communication link interruptions, remote‑ID identification failures and aircraft hijacking via cyberattacks. Urban low‑altitude operations are highly dependent on communication, navigation and perception infrastructure. Failures of infrastructure or communication service providers may trigger cascading accidents, whose liabilities are often overlooked in current practices.
Risk levels vary greatly across scenarios. Agricultural‑forest plant protection and remote‑area power‑grid inspection belong to relatively low‑risk scenarios. Urban logistics delivery and mapping survey are medium‑risk scenarios. Manned eVTOL urban commuting and low‑altitude tourism are high‑risk scenarios, which may cause massive casualties and property losses with strong risk spill‑over effects once accidents occur.
2.2 Prominent Pain Points in Current Low‑Altitude Accident Disposal and Liability Definition
2.2.1 Intersection of Multiple Entities and Complicated Causal‑Traceability
Multiple factors often overlap in one low‑altitude accident. For instance, a UAV crash during urban operations may result from combined defects including battery quality flaws, pilot mis‑handling and GNSS signal blockage by high‑rises. Limited black‑box data storage capacity of small‑sized UAVs may lead to loss of flight logs after accidents, making it hard to quantify the contribution ratio of each participating entity. There lacks unified practical standards for primary‑and‑secondary liability division under multi‑cause‑single‑result conditions. Judicial adjudication standards differ in similar cases, bringing unstable risk expectations for enterprises.
2.2.2 Absence of Unified Detailed Rules for Liability‑Attribution Mode
Liability determination may refer to the Tort Liability Chapter and Product Liability provisions in the Civil Code, Civil Aviation Law and Interim Regulations on the Administration of Unmanned Aerial Vehicle Flights. However, special judicial interpretations and adjudication guidelines targeting low‑altitude unmanned‑aircraft accidents remain insufficient. Discussions persist within the industry over whether to adopt no‑fault liability or presumption‑of‑fault liability. Manned low‑altitude aircraft closely relate to public life safety, hence no‑fault liability of high‑risk operations is theoretically applicable. Nevertheless, uniform strict no‑fault liability for low‑risk agricultural‑forest scenarios will substantially raise operating costs for small‑and‑medium‑sized enterprises and restrain industrial development. Differentiated institutional design has become a realistic challenge.
2.2.3 Insufficient Professional Accident Appraisal Capacity and Absence of Unified Loss‑Assessment Standards
Low‑altitude accident appraisal requires interdisciplinary expertise covering aircraft hardware, flight‑control algorithms, communication navigation and meteorology. There are a limited number of qualified third‑party appraisal institutions in China. While personal‑injury disability assessment is relatively mature, standardized evaluation methods for ground‑property damage, aircraft loss and indirect operation‑interruption losses are absent. High appraisal costs and long cycles prevent parties in minor‑loss accidents from initiating appraisal, resulting in prolonged disputes.
2.2.4 Liability‑Definition Difficulties Aggravated by Unauthorized Flights
Numerous micro‑UAV users are private individuals without real‑name registration or flight‑plan filing, conducting so‑called “black flights”. In case of accidents, involved aircraft are hard to trace and responsible parties are difficult to identify. Injured parties face high evidence‑collection costs and hardly obtain civil compensation. Some commercial entities cut costs by hiring unqualified pilots and purchasing no insurance. Once accidents happen, enterprises lack solvency and third‑party victims cannot get full compensation.
2.3 Practical Shortcomings of Insurance Mechanisms in Accident Disposal
Insurance shall serve for loss transfer and risk dispersion, yet its functions are not fully exerted in current low‑altitude practices. Firstly, scarcity of historical accident data results in lack of large‑sample long‑term flight‑accident databases, hindering accurate risk rate calculation for insurers. Secondly, corresponding insurance products are absent for some high‑risk scenarios, and guarantee schemes for manned eVTOL are still under pilot testing. Thirdly, some enterprises are reluctant to purchase insurance due to perceived high premium costs. Fourthly, without clarified accident liabilities, insurance claim settlement is prone to liability buck‑passing, further prolonging dispute resolution cycles.
3. Framework and Path for Defining Multi‑party Liabilities for Low‑Altitude Accidents
The definition of low‑altitude accident liabilities adheres to basic principles of “matching inducing factors with faults, distinguishing scenarios and multi‑party liability‑attribution”. It clarifies liability boundaries among manufacturers, component suppliers, operators, infrastructure service providers, communication service providers and regulatory authorities. It differentiates direct liabilities, secondary liabilities and supplementary liabilities triggered by product defects, human faults, external environments and third‑party sabotage, as well as civil tort liabilities, administrative liabilities and criminal liabilities. Insurance only covers civil loss compensation and cannot exempt parties from administrative or criminal liabilities. Even with full insurance coverage, entities with gross negligence or intentional unauthorized flights shall still bear administrative penalties and even criminal liabilities.
3.1 Liability Boundaries of Each Participating Entity
3.1.1 Liabilities of Aircraft Manufacturers
Manufacturers mainly bear product‑defect liabilities under strict‑liability principles. Where accidents occur under normal operating conditions due to design defects, manufacturing‑process flaws or factory‑installed software vulnerabilities, manufacturers shall assume tort compensation liabilities. Manufacturers shall not be fully exempted merely by obtaining airworthiness certificates, for airworthiness represents minimum safety access rather than full exemption from product‑defect tort liabilities. Manufacturers may be mitigated or exempted from liabilities if accidents arise from unauthorized hardware‑software modification or operation beyond specifications by end‑users. For manned eVTOL aircraft which may incur huge losses upon product‑defect accidents, manufacturers shall establish complete product traceability, fault feedback and recall mechanisms.
Component suppliers: Where accidents are induced by quality defects of batteries, motors, navigation chips, flight‑control modules and other components, original‑equipment manufacturers may pursue recourse against component suppliers after making advance compensation to third‑party victims, who may also claim compensation directly from component suppliers.
3.1.2 Liabilities of Low‑Altitude Operators
Operators are organizers and implementers of flight activities, ranking among core liable parties in accidents. Operators include UAV logistics enterprises, low‑altitude cultural‑tourism companies, urban‑air‑mobility operators and plant‑protection service enterprises. Operators shall fulfill obligations including airspace‑application filing, flight‑scheme evaluation, personnel qualification management, routine aircraft maintenance, meteorological‑risk assessment and emergency‑plan formulation.
1. Operators shall bear major tort liabilities for accidents caused by dispatching errors, unauthorized flights, inadequate maintenance and insufficient staff training.
2. For misoperations of externally‑hired pilots during assignment, operators shall bear external liabilities and may pursue recourse against pilots with intent or gross negligence afterwards.
3. For third‑party damages caused by trainees’ misoperations during teaching flights, training institutions shall bear external liabilities. Trainees shall bear liabilities on their own for private flights outside teaching arrangements.
3.1.3 Liabilities of Pilots and Individual End‑users
Qualified pilots conducting private flights off‑duty, or hobbyists operating micro‑UAVs without airspace filing or with unauthorized modifications, shall bear full civil compensation liabilities for accidents caused by subjective faults, together with corresponding administrative penalties; criminal liabilities shall be pursued for severe consequences. Individual end‑users may claim recourse against manufacturers if accidents are caused by inherent product defects.
3.1.4 Liabilities of Low‑Altitude Infrastructure and Communication‑Network Service Providers
Infrastructure operators shall bear corresponding fault liabilities for accidents caused by improperly maintained vertical take‑off and landing sites, collapsed platforms or failed protective facilities. Communication operators shall bear liabilities for communication‑link interruptions resulting from their service failures below industrial‑standard service‑level requirements, and shall be exempted if failures are caused by unforeseeable force majeure. For aircraft hijacking by cyberattacks, perpetrators shall bear primary civil and criminal liabilities. Manufacturers and operators may mitigate liabilities if they have fulfilled reasonable cybersecurity‑protection obligations.
3.1.5 Boundary of Regulators’ Liabilities
Regulatory authorities perform administrative supervision duties covering airspace approval, qualification administration and safety oversight. Failure to perform regulatory duties is evaluated under administrative law rather than giving rise to direct civil tort compensation liabilities to accident victims. State compensation shall apply only under special circumstances where grossly illegal administrative acts directly cause damages. Market‑entity operational risks shall not be transferred to regulatory authorities.
3.2 Liability‑Attribution Rules for Different Accident‑Inducing Factors
3.2.1 Accidents Triggered by Product Defects
Liability‑attribution principle: Strict product liability. Victims are not required to prove manufacturers’ subjective faults, but only to prove that accidents are directly caused by product defects. Manufacturers may defend themselves or mitigate liabilities by proving absence of defects, unauthorized modifications by end‑users or operations beyond product specifications.
3.2.2 Accidents Triggered by Operational Management or Human Misoperation
Liability‑attribution principle: Fault liability. Judgement shall be made on whether operators and pilots have fulfilled safety obligations and committed faults such as unauthorized flights, inadequate maintenance and insufficient training. Liabilities shall be divided proportionally according to fault severity.
3.2.3 Accidents Triggered by Natural Environmental Factors
Gales, thunderstorms and bird strikes do not constitute automatic exemptions. Judgement criteria include whether operators obtain meteorological early warnings in advance, set meteorological thresholds and suspend flights under adverse weather. Operators shall still bear liabilities if they force flights under unfit meteorological conditions despite early warnings. Liabilities may be mitigated for unforeseeable extreme natural disasters when all safety obligations have been fulfilled.
3.2.4 Multi‑cause‑single‑result Mixed‑factor Accidents
Most real‑world accidents involve mixed inducing factors. Technical appraisal shall be conducted to quantify the contribution degree of each factor and divide primary‑and‑secondary liabilities proportionally. For example, where a crash results from combined slight battery quality hazards and pilots’ over‑load flights, manufacturers and operators shall share compensation liabilities according to respective cause‑contribution ratios.
3.2.5 Third‑party Malicious Sabotage and Cyberattacks
Perpetrators of sabotage shall bear primary civil and criminal liabilities. Manufacturers and operators may mitigate liabilities upon proof of adequate cybersecurity and aircraft‑safety protection measures.
3.3 Thinking on Scenario‑differentiated Liability‑attribution Design
Drawing on domestic academic research viewpoints, a dual liability‑attribution model shall be implemented to balance safety requirements and industrial cost affordability.
First, high‑risk scenarios: Manned eVTOL and manned low‑altitude tourism in core urban areas, which conduct public‑oriented manned flights and pose high risks to ground third parties, shall adopt no‑fault‑liability principles. Operators shall undertake strict liabilities to compel top‑tier enterprise safety management, and shall purchase high‑limit third‑party liability insurance and carrier liability insurance compulsorily.
Second, medium‑risk scenarios: Commercial unmanned low‑altitude operations such as urban logistics delivery and urban mapping inspection shall adopt presumption‑of‑fault liability. Operators are presumed to be at fault upon accidents, yet may be exempted or mitigated from liabilities by proving full fulfillment of safety obligations.
Third, low‑risk scenarios: Agricultural‑forest plant protection and remote‑area power‑grid inspection with low exposure of personnel and property shall adopt general fault liability. Plaintiffs shall prove faults of counterparties, avoiding excessive institutional costs restraining small‑and‑medium‑sized enterprises in sinking markets.
4. Current Situation of China’s Low‑Altitude Insurance Market and Realistic Constraints for Product Innovation
4.1 Development Status of the Low‑Altitude Insurance Market
Driven by low‑altitude‑economy policies, Chinese insurance institutions have expanded layout in the low‑altitude sector. More than 40 property‑insurance companies have launched approximately 180 low‑altitude‑related insurance products, mainly targeting UAVs. Chongqing established China’s first low‑altitude‑economy co‑insurance pool consisting of 19 insurance institutions, piloting compulsory liability insurance for unmanned aerial vehicles by binding insurance‑purchase status with flight approval. It issued the first batch of pilot insurance policies, providing risk coverage of tens of millions of RMB for hundreds of UAVs and forming replicable local practices.
Major existing insurance types include: aircraft hull loss insurance compensating for UAV damage or loss; third‑party liability insurance, the core type covering personal injuries and property losses of ground third parties caused by flights; pilot personal‑accident insurance covering bodily injuries of operators. Some institutions have developed innovative products including airborne‑equipment‑loss insurance, logistics‑cargo‑liability insurance, operation‑interruption‑loss insurance and special test‑flight insurance. Deep strategic cooperation has been carried out between leading insurers and low‑altitude industrial leaders, and agricultural‑plant‑protection UAV insurance has achieved large‑scale implementation as an industry standard.
Policies have clarified timetables for institutional development. A compulsory‑liability‑insurance system for unmanned aerial vehicles shall be initially established by 2027, with demonstration clauses and minimum coverage limits formulated. Compulsory insurance‑purchase shall be incorporated into pre‑review procedures for flight approval, realizing insurance‑status verification in accident disposal, opening institutional space for low‑altitude insurance.
4.2 Prominent Shortcomings in Current Insurance Product Systems
4.2.1 Products Concentrated on Mature Low‑risk Scenarios with Insufficient Supply for High‑risk Manned Scenarios
Existing products mostly target small‑and‑medium‑sized industrial UAVs, with relatively mature offerings for agricultural‑forest plant protection and mapping inspection. Mature standardized insurance solutions are absent for manned eVTOL commuting and high‑density urban multi‑aircraft mixed‑flight scenarios. Single‑accident potential compensation for manned scenarios is extremely huge. Given limited underwriting capacity of individual insurers, institutions remain generally cautious without supporting co‑insurance and re‑insurance mechanisms. Most current insurance clauses list indirect losses caused by algorithm defects, cyberattacks and remote‑ID failures as exclusions, leaving protection gaps. Special insurance products for high‑frequency‑loss components such as batteries are scarce.
4.2.2 Inconsistent Clause Standards and Uneven Protection Scope
Insurance clauses are independently formulated by different insurance companies. Even for products named “UAV third‑party liability insurance”, exemptions, excluded liabilities and compensation limits vary greatly among insurers. Some products directly exclude losses caused by communication‑link failures, software malfunctions and urban‑environment collisions. Enterprises face difficulties in horizontal comparison during insurance purchase, and clause‑interpretation disputes easily emerge in claim settlement. Absence of unified industry demonstration clauses hinders implementation of compulsory‑insurance systems.
4.2.3 Deficient Data Foundation for Risk Pricing
Insurance actuarial work requires massive samples of accidents, flight hours and risk‑incident statistics. Large‑scale commercial low‑altitude operations in China have a short history, and a complete national accident‑statistics database has not been built. Insurers have limited access to authentic enterprise flight data and cannot realize refined differentiated pricing, thus adopting one‑size‑fits‑all premium models. Enterprises with excellent safety records cannot enjoy premium discounts, while high‑risk operators face no premium penalties. UBI (Usage‑Based Insurance) dynamic pricing mechanisms based on flight behaviors are absent, weakening insurance’s leverage effect in incentivizing safe operations.
4.2.4 Conflicts Between Insurance‑purchase‑cost Pressures and Willingness of Small‑and‑medium‑sized Enterprises
For numerous small‑and‑medium‑sized low‑altitude service providers, premium costs will rise significantly if high‑coverage limits for manned and urban‑operation scenarios are adopted. Some micro‑UAV end‑users consider accident probabilities low and resist purchasing insurance. On the contrary, insufficient coverage limits will result in insurance compensation failing to cover losses once major accidents occur, so that risk transfer cannot be realized. Balancing minimum coverage limits and enterprise cost affordability constitutes a core difficulty in product design.
4.2.5 Imperfect Risk‑dispersion Tools
Individual insurance companies have limited capital capacity for huge compensation triggered by major eVTOL accidents. China’s low‑altitude re‑insurance market remains under‑developed. Co‑insurance‑pool models are only implemented in a small number of pilot cities rather than nationwide. Government‑guided risk‑guarantee funds as final‑defense mechanisms are lacking, leading to the objective phenomenon that insurers “dare not and are unwilling to underwrite” high‑risk businesses.
4.3 Underlying Factors Restricting Insurance Innovation
First, incomplete liability‑definition rules for accidents. Ambiguous liability division prevents insurers from clarifying compensable losses and excluded liabilities, directly restricting clause design. Second, flight‑data silos exist. Data among regulatory platforms, enterprise operation platforms and insurance institutions are not interconnected, hindering insurers’ access to risk factors. Third, imperfect loss‑assessment systems increase uncertainties in claim settlement due to difficulties in evaluating loss magnitude and accident‑inducing factors after accidents. Fourth, segmented scenarios feature highly differentiated demands. Manned flight, logistics, plant protection and emergency rescue follow completely different risk logics, bringing high R&D costs for customized products.
5. Complete Construction Path for Low‑Altitude Accident Liability Definition, Insurance Product Innovation and Risk‑sharing Mechanisms
The whole mechanism follows the logic of “taking clarified liability‑definition rules as precondition, insurance‑product innovation as core tool, and multi‑party risk‑sharing as destination”. A full‑chain closed‑loop system is built: “legislative liability definition‑appraisal support‑compulsory‑insurance foundation‑scenario‑based product matrix‑co‑insurance and re‑insurance dispersion‑guarantee‑fund back‑up‑diversified‑dispute resolution”.
5.1 Improve Institutional Foundation for Low‑Altitude Accident Liability Definition
5.1.1 Promote Implementation of Legal Detailed Rules and Judicial Adjudication Guidelines
With the enforcement of the revised Civil Aviation Law of the People’s Republic of China, supporting rules for liability determination of unmanned‑aircraft accidents shall be accelerated, clarifying liabilities of manufacturers, operators, end‑users and infrastructure service providers. The dual liability‑attribution concept shall be institutionalized, with respective liability‑attribution principles specified for high‑risk manned scenarios, urban commercial operations and low‑risk field operations. The Supreme People’s Court shall release typical low‑altitude‑tort cases to unify judicial adjudication standards, reduce judgement discrepancies in similar cases and deliver clear legal expectations for insurance claim settlement.
Rules for handling multi‑cause‑single‑result accidents shall be clarified, defining the status of technical appraisal in mixed‑liability accidents and practical rules for allocating compensation liabilities according to accident‑factor contribution ratios. It shall be clarified that insurance compensation cannot exempt entities from administrative or criminal liabilities, sorting out boundaries among civil compensation, administrative penalties and criminal investigations.
5.1.2 Build Professional Low‑Altitude‑Accident Technical Appraisal Systems
Qualified third‑party low‑altitude‑accident appraisal institutions shall be fostered, and appraisal‑institution directories shall be established. Technical specifications for accident appraisal shall be improved, covering hardware failures, flight‑control‑algorithm defects, navigation‑communication malfunctions and environmental‑factor analysis. Standard accident‑investigation procedures shall be formulated. For major low‑altitude safety accidents, technical investigations shall be conducted referencing civil‑aviation accident‑investigation mechanisms, and accident‑investigation reports shall be issued as critical bases for liability definition and insurance claim settlement. Standardized loss‑assessment specifications shall be formulated to unify evaluation methodologies for personal injuries, property losses, aircraft losses and indirect operation‑interruption losses, lowering appraisal costs and simplifying disposal procedures for minor accidents.
5.1.3 Improve Accident‑traceability Mechanisms and Strengthen Mandatory Real‑name Registration and Flight‑log Preservation
Real‑name registration systems for unmanned aerial vehicles shall be implemented, and large‑scale deployment of remote‑ID identification technologies shall be promoted to realize rapid traceability of accident‑involved aircraft. Commercial‑operation aircraft shall be mandated to preserve complete flight logs and black‑box data, with standardized storage‑and‑retention requirements ensuring data accessibility after accidents. Acts of unauthorized modification and flight‑log destruction shall be severely punished to resolve traceability difficulties for unauthorized flights and provide technical foundations for liability definition.
5.2 Innovation Path for Low‑Altitude Insurance Product Systems
Guided by national Opinions on Promoting the High‑Quality Development of Low‑Altitude Insurance, a multi‑level low‑altitude insurance‑product matrix shall be constructed: “compulsory insurance as foundation, layered commercial insurance as supplement and customized segmented‑scenario products as extension”.
5.2.1 Implement Compulsory Third‑party Liability Insurance for Unmanned Aerial Vehicles
Compulsory insurance shall be implemented in accordance with established timetables. First, national unified demonstration clauses for compulsory liability insurance shall be issued, with tiered minimum coverage limits set according to aircraft weight grades and operation scenarios. High coverage limits shall apply to manned eVTOL; medium limits for urban commercial operations; basic limits for micro‑UAVs operated by non‑commercial private individuals. Second, binding mechanisms between insurance‑purchase and flight approval shall be implemented, verifying insurance‑status during flight‑plan filing and approval procedures to prevent uninsured flights. Third, compulsory insurance only covers third‑party personal injuries and property losses rather than aircraft‑own losses, which shall be covered by commercial hull insurance. Fourth, premium‑floating mechanisms shall be explored by introducing UBI concepts. Premiums shall be linked with enterprise safety records, violation records and flight data. Premium discounts shall apply to entities with sound safety records, while premium surcharges shall be imposed on entities with frequent accidents or violations, exerting positive incentive‑restraint effects via insurance.
5.2.2 Develop Layered and Classified Commercial Insurance Products for the Whole Industrial Chain
Beyond compulsory insurance, commercial‑insurance supply shall be enriched to form a complete product matrix.
1. Aircraft‑property insurance: All‑risk hull insurance covering crashes, losses and fires; special insurance for high‑frequency‑loss components such as batteries and airborne sensors to fill existing protection gaps.
2. Operation‑liability insurance: Specialized logistics‑cargo liability insurance, plant‑protection‑operation liability insurance, special test‑flight insurance and carrier‑liability insurance (for manned eVTOL covering passenger casualties); operation‑interruption insurance covering enterprise economic losses caused by post‑accident grounding.
3. Innovative insurance for emerging risks: Optional additional‑risk insurance targeting algorithm defects, cyberattacks and communication failures beyond general exemptions, addressing new‑type digital low‑altitude risks. Low‑altitude‑infrastructure insurance covering equipment damages and third‑party liabilities of vertiports shall be developed to fill insurance gaps for infrastructure operators.
4. Fragmented flexible products: Short‑term project‑oriented insurance products by sortie or flight‑hour shall be developed to reduce one‑off premium burdens for small‑and‑medium‑sized enterprises.
5.2.3 Build Data Foundations to Support Refined Insurance Pricing
A low‑altitude‑insurance information‑sharing platform shall be built. Under the premise of protecting enterprise commercial secrets, appropriate data sharing shall be realized among regulatory flight data, enterprise operation data and insurance underwriting‑claim data. Industry accident‑case databases shall be accumulated to resolve insurers’ shortage of risk‑sample data for actuarial calculation. Insurers shall be promoted to connect with low‑altitude‑operation platforms to obtain flight‑hour statistics, airspace‑type information and historical risk events, realizing dynamic pricing based on actual operation behaviors and breaking one‑size‑fits‑all premium models.
5.3 Build Multi‑party‑collaborative Multi‑level Risk‑sharing Mechanisms
Individual insurance institutions cannot independently bear huge compensation losses of major low‑altitude accidents. A five‑tier risk‑sharing chain shall be constructed: “entity self‑responsibility at industrial‑chain front‑end‑risk transfer via commercial insurance‑aggregated underwriting by co‑insurance pools‑secondary risk dispersion by re‑insurance‑final back‑up by government‑led risk‑guarantee funds”. Risks shall be reasonably allocated among manufacturers, operators, insurance industry, capital markets and governments.
5.3.1 Tier‑1: Implement Primary Entity Liabilities at Industrial‑chain Front‑end
Manufacturers shall implement product‑quality‑safety primary liabilities, establishing quality‑control and product‑recall mechanisms. Operators shall improve internal safety‑management systems, implement personnel training and flight‑risk assessment, and complete pre‑event risk prevention and control. Insurance serves only as post‑accident loss‑compensation tools rather than substitutes for enterprise safety management. Enterprises must undertake primary safety‑investment responsibilities and reduce accident probabilities via internal risk control from the source.
5.3.2 Tier‑2: Risk Transfer via Commercial‑insurance Markets
Enterprises shall purchase compulsory insurance in compliance with legal requirements and select corresponding supplementary commercial insurance according to their scenarios. Manufacturers shall be equipped with product‑liability insurance; operators with hull insurance, carrier‑liability insurance and operation‑liability insurance; infrastructure service providers with facility‑liability insurance. Insurance converts huge uncertain accident losses for individual enterprises into predictable stable premium expenditures, realizing risk transfer to the insurance industry.
5.3.3 Tier‑3: Promote Low‑altitude‑economy Co‑insurance‑pool Models to Aggregate Industrial Underwriting Capacity
Drawing on practical experience of the Chongqing low‑altitude‑economy co‑insurance pool, national promotion of such mechanisms shall be carried out. Multiple insurance institutions shall jointly participate to share high‑coverage high‑risk businesses, addressing insufficient underwriting capacity of individual insurers especially for high‑value manned‑eVTOL businesses. Co‑insurance pools shall adopt unified clauses and claim‑settlement standards to eliminate clause inconsistencies among different insurers. Leading‑chain enterprises shall be encouraged to drive upstream‑and‑downstream small‑and‑medium‑sized enterprises to participate in co‑insurance schemes in batches and lower insurance‑purchase thresholds.
5.3.4 Tier‑4: Leverage Re‑insurance Markets for Secondary Risk Dispersion
Re‑insurance institutions including China Re shall be guided to deeply engage in the low‑altitude economy. Huge risks borne by co‑insurance pools shall be further dispersed to re‑insurance markets to smooth annual‑compensation fluctuations for insurance institutions. Special re‑insurance products targeting manned low‑altitude businesses shall be developed to increase the total risk‑bearing capacity of the whole insurance industry.
5.3.5 Tier‑5: Establish Low‑altitude‑economy Risk‑guarantee Funds as Final Social‑safety‑net
Research shall be conducted to set up low‑altitude‑risk‑guarantee funds as the final safeguard of the whole system. Capital sources may include moderate local‑financial guidance, appropriate contributions from industrial enterprises and profit withdrawals from co‑insurance‑pool businesses. Funds shall be limited to extreme major accidents, providing back‑up compensation for third‑party victims after insurance‑compensation limits are exhausted, preventing victims from receiving no compensation upon enterprise bankruptcy caused by major accidents. Funds shall be strictly limited to post‑accident compensation and shall not replace insurance‑purchase obligations of enterprises, so as to avoid moral hazards and prevent enterprises from relaxing safety management relying on fund back‑ups.
5.3.6 Supporting Diversified Dispute‑resolution Mechanisms
A dispute‑resolution pattern of “mediation priority, professional arbitration diversion and litigation as final resort” shall be established. Minor‑property‑loss disputes shall be prioritized for industry mediation with judicially‑confirmable mediation agreements. For accident‑compensation disputes involving complex technical controversies, professional arbitration channels with low‑altitude‑specialized arbitrators shall be set up to leverage the confidentiality and professionalism of arbitration. Major controversies shall be finally resolved via litigation. Courts shall issue case‑adjudication guidelines to unify judgement standards, reduce liability‑definition disputes and accelerate settlement of insurance‑claim conflicts.
6. Supporting Measures and Industry Outlook
6.1 Supporting Measures
First, promote cross‑departmental collaborative governance. Civil aviation, development‑and‑reform, financial‑supervision, public‑security and market‑regulation authorities shall collaborate to integrate accident investigation, liability definition, compulsory‑insurance supervision and flight‑regulation work. Regulators shall release regular low‑altitude‑accident statistics, disclosing desensitized statistical data to industry and insurance institutions to support insurance‑product R&D.
Second, strengthen compliance publicity for industrial entities. Legal‑popularization campaigns targeting aircraft manufacturers, operation‑service providers and pilots shall be carried out to clarify legal consequences of accidents. Enterprises shall be guided to build a risk‑management system integrating “safety management plus insurance guarantee”, correcting the misconception that “insurance purchase justifies ignoring safety management”.
Third, encourage local pilot‑project implementation. Low‑altitude‑reform pilot cities shall be encouraged to take the lead in local practices of accident appraisal, co‑insurance pools and risk‑guarantee funds, forming replicable experience for nationwide promotion. Local governments may optimize coverage limits and insurance‑purchase rules according to local industrial structures.
Fourth, strengthen reference to international experience. Practices of accident‑liability rules and insurance schemes for foreign urban‑air‑mobility (UAM) sectors shall be tracked and localized for China’s national conditions. Global updates on airworthiness and insurance rules shall be followed to support global‑market participation of China’s low‑altitude industry.
6.2 Industry Outlook
The low‑altitude economy belongs to a rapidly iterating emerging industry. Construction of accident‑liability‑definition and insurance systems cannot be accomplished in one step, and shall be continuously optimized along with technological iteration and accumulation of commercial‑operation data. In the short term, priorities shall be placed on improving legal detailed rules and accident‑appraisal capacities, implementing compulsory‑liability‑insurance systems and resolving pain points of ambiguous liabilities and difficult claim settlement. In the medium term, full‑scenario insurance‑product matrices shall be gradually improved, co‑insurance pools shall be promoted nationwide, and complete risk‑sharing chains shall be built. In the long run, with accumulation of flight‑sample data, UBI dynamic‑pricing models will mature, and the liability‑insurance‑risk‑sharing system will become well‑established.
Essentially, the definition of low‑altitude accident liabilities, insurance innovation and risk‑sharing mechanisms are not designed to restrict low‑altitude‑economic development, but to realize risk controllability via institutional design, resolving the dilemma of “enterprise bankruptcy upon accidents and no compensation for victims”. Balancing innovative development and public‑safety protection will guarantee sound development of the low‑altitude economy and release the value of new‑quality productive forces.
Data‑source Statement
1. Primary‑research data: Field‑investigation interview records of BUCKHOUSE Research Institute of Low‑Altitude Economy in domestic low‑altitude pilot cities from 2024 to 2026, sorted low‑altitude‑accident cases and multi‑scenario risk‑simulation deduction materials.
2. Domestic official policies and public documents: Opinions on Promoting the High‑Quality Development of Low‑Altitude Insurance jointly issued by the National Development and Reform Commission, State Administration of Financial Supervision and Administration and Civil Aviation Administration of China; Civil Code of the People’s Republic of China; revised Civil Aviation Law of the People’s Republic of China; Interim Regulations on the Administration of Unmanned Aerial Vehicle Flights; Civil Aviation Administration of China industry statistical bulletins; local low‑altitude‑economy pilot policy documents across China; public materials of the Chongqing Low‑Altitude‑economy Co‑insurance Pool.
3. Public industry research and market data: Industrial surveys published by 21st Century Business Herald, DoNews, Xinhuanet and China Economic Net; research outputs from Swiss Re Institute and China Insurance Industry Association; publicly filed low‑altitude‑insurance‑product information of over 40 domestic insurance institutions; low‑altitude‑economy industry reports from 36Kr Research Institute and China Academy of Information and Communications Technology.
4. Foreign reference materials: Public industry reports on liability governance and insurance mechanisms for overseas Urban Air Mobility (UAM).
5. Judicial‑case sources: Public judgement documents of Chinese courts at all levels and special‑research literature on low‑altitude‑tort disputes from legal institutions.
Disclaimer
This report is jointly compiled by BUCKHOUSE Intelligent Technology (Suzhou) Co., Ltd., BUCKHOUSE Research Institute of Low‑Altitude Economy and relevant platforms. All contents are for industrial‑research‑analysis purposes only, and shall not constitute any legal advice, insurance‑purchase suggestion or investment‑decision guidance. Cited public materials and data are sourced from public industrial channels. The compiling team strives for authenticity and reliability of information, yet does not guarantee absolute accuracy or completeness of original data sources. Viewpoints in this report represent only analytical judgements of the research team, and do not stand for positions of any regulatory or insurance institutions. All consequences arising from market entities’ business operations, insurance purchases or legal disposals based on this report shall be borne by the entities themselves. Unauthorized tampering and commercial reproduction of this report are prohibited. Full citation of compiling entities shall be required when quoting contents of this report.
