Farmers must ensure they are up-to-date on the rules and regulations on drones or risk penalties of thousands of pounds.
NFU Mutual said drone technology was developing fast and already offering exciting possibilities, including precision application of crop treatments, and detailed surveying.
But farmers were unaware of the laws they must follow for safe operation of the equipment, it said.
The insurer, which teamed up with rural police forces, as well as agricultural specialist providers to break down the rules on drone use, said farmers must understand their legal position.
NFU Mutual’s farm technology specialist Charlie Yorke said: “It is worrying some farmers buying a drone do not realise there are laws which have to be observed when flying them.
"This includes specific insurance cover and consideration when they are receiving money for flying their drone as a service to other farmers.”
In the case of a farmer surveying his own crops with a view to alter how he would manage the crops, either by spraying or cultivating, the flight would then be classed as a non-recreational one.
Insurance would be required to cover third-party liability risks, but permission for commercial operations was not needed, Mr Yorke said.
“However, if the farmer charged his neighbour to survey that neighbour’s crops, this would be classed as a commercial operation and the relevant permission and commercial insurance is required.”