If you are considering using a drone as part of your business operations, it is important to consult with your insurance agent to add coverage and to understand the recent regulations published by the Federal Aviation Administration (FAA).
In 2016, drone usage was officially sanctioned for commercial operations by the FAA. The legal framework was first created by the FAA333 Exemption rule. The rules were eventually fully developed and codified by the release of FAA Regulation Part 107.
14 CFR Part 107 provides rules for using drones for a commercial purpose, designed to create a clear path for American businesses to implement the drone technology in their operations. The rules require commercial use drones to:
- Be operated by properly licensed pilots
- Not exceed 55 lbs in weight
- Adhere to the maximum ground speed of 100 mph
- Be operated by visual line-of-sight
In addition, the rule prohibits operation of the drone over any person not participating in the operation as a means to protect privacy. It is important to note that, at a contractor site, subcontractors, suppliers, and visitors would not be considered participants in the operation, and thus flying a drone over any such person would likely be considered a violation of the CFR Part 107 code.
In addition, the FAA is taking a specific position on the definition of commercial usage. Any drone, regardless of the machine’s ownership or operator status, flown within the scope of a commercial enterprise is considered a commercial flight and thus is governed by Regulation Part 107. In other words, a drone purchased as a Christmas present with the intent to be used as a hobby, becomes a commercial drone the second it takes flight to aid with any commercial operation whether it’s a quick roof inspection or a photo shoot of a house for sale.
Commercial usage of drones creates an obvious exposure for users. There is real and significant liability potential for bodily injury, property damage and personal injury arising out of a drone flight. A drone can crash and cause bodily injury or damage something of value. It can also directly cause a crash of another object such as a plane or a motor vehicle possibly causing catastrophic damage.
A drone could also be considered violating a person’s privacy if a drone is taking video or photos without express permission of the people or landowner.
Since a drone is considered an “aircraft” it is typically not covered by your standard general liability or property coverages. Owners and operators of drones should consult with their insurance agents to discuss the best approach for providing coverage.
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