The Downside of Drones

 OP INSTITUTIONALBy Sam Laurin

Drones are already a common presence on many construction sites, and by all accounts, will only increase in use. While the use of drones on construction projects has a significant upside, there are a number of things that could go wrong. What if the drone crashes and causes personal injuries or damages property? What if the drone gets off course and captures unauthorized photos and videos?

The Federal Aviation Administration recently revised the rules and regulations concerning the use of drones for commercial purposes, including for a construction project. These changes, which became effective in August, are generally viewed as making it easier to operate a drone commercially. Some of the key components of the current rules are: 1) A drone must be operated by remote pilot airman certificate or under the supervision of someone who holds a certificate;
2) The drone must be visible to the operator while operating;
3) The remote pilot must complete a preflight inspection; and
4) The drone cannot be flown over any persons not directly participating in the operations. Insurance Matters
While it may be tempting for some to create an in house ‚drone program, a strong case can be made to contract with a third-party drone operator for several reasons. Even if someone in house has an airman's certificate, it is unlikely that the person‚Äôs job description is to operate a drone. Flying a drone on a regular basis should hopefully mean that an operator has a fundamental understanding of the legal and practical requirements necessary to operate a drone. Not only does contracting with an operator make practical sense, it also makes sense from the perspective of how most commercial general liability policies (CGL) are written. Most CGL policies exclude coverage for claims arising out of an insured's use of an aerial vehicle that is owned or rented by an insured. CGL policies also generally provide coverage for vicarious liability of an insured for claims arising out of the use of aerial vehicle operated by a third party. It is likely if you contract with an operator and get sued based on the operator's use of a drone that you might have coverage, but if you do it in-house you will likely not have coverage.
     
Does a good risk management program begin and end with a decision to contract out a drone service? No. Currently there is no requirement that a drone operator have insurance. Confirming that the operator has insurance is obviously critical. Even more critical is confirming that the operator actually has coverage for operating a drone with meaningful policy limits. As noted previously, a standard CGL policy without endorsements adding coverage for drone use is probably not going to provide the necessary coverage to the operator.
 
Although the common and understandable practice on construction project is to confirm coverage through certificates of insurance, in the case of contracting with an operator the actual policy should be requested. This is because certificates of insurance do not guarantee coverage. Given that drone use is such a recent phenomenon and some insurers do write specific policies for drone use, it is worth the extra effort to get the actual policy. If an operator resists providing the actual policy, then that may be a warning sign. It also should be noted that even companies that specifically provide coverage for drones may very well still exclude coverage for claims for damages outside personal injury and property damage (such as invasion of privacy or patent infringement) without specific endorsements. Contract Language
Before an engaging an operator, there obviously needs to be a written contract with standard provisions including an indemnification provision. You should find out whether you can be named as an additional insured on the policy. One unanswered question on insurance and indemnification is that some states limit the scope of indemnification on construction projects. Would a contract with a drone operator fall under a statute limiting the scope of indemnification on a construction project? As part of the contracting process you should ask for proof that the FAA has approved the operator to use a drone for commercial purposes.
     
Not only is the law complex but it is almost certainly going to change as drone use becomes even more prevalent. In addition to the FAA's current new rules, there are also several states that have enacted statutes that address drone use to some degree. The association of states has a very useful website to determine if there are any laws in a particular state that pertain to drones, but that is no substitute for an experienced operator. Sam Laurin is a partner at Bose McKinney & Evans LLP and is chair of the construction law group and of the litigation group. He can be reached at 317-684-5185 and slaurin@boselaw.com.

Current Issue

Check out our latest Edition!

 

alan jim blog ct

Contact Us

Construction Today Magazine
150 N. Michigan Ave., Suite 900
Chicago, IL 60601

  312.676.1100
  312.676.1101

Click here for a full list of contacts.

Latest Edition

Spread The Love

Back To Top