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                                                               Managing Drone Risks

                                                                 Many design firms that start using drones to improve and broaden
                                                               their design services begin by hiring third-party pilots with extensive
                                                               knowledge of unmanned vehicles. Then, as experience is gained, the
                                                               firm may hire its own pilot and purchase or lease its own drones.
                                                                 Regardless, check with your attorney regarding compliance with FAA
                                                               regulations. Together, determine if there are any state or local restrictions
                                                               or requirements on the commercial use of small unmanned aircraft.
                                                                 Your primary tool for managing risks is to ensure your pilots and any
                                                               others directing the use of drones at your firm are well trained, knowl-
                                                               edgeable, experienced and conscientious regarding the safety and pri-
                                                               vacy of others. Inform all relevant parties of your upcoming drone oper-
                                                               ations. Develop a privacy policy that specifies the reasons for the aerial
                                                               operations;  what  data  you  are  collecting;  and  how  that  data  will  be
                                                               used, retained, and disseminated. Where possible, get a consent form
        •  Once licensed, a remote pilot in command must:      from all parties directly affected by the drone flights. Also, set policies
                                                               for securing, limiting access to and deleting collected data.
        •  Make the small unmanned aircraft and related documentation avail-
          able for inspection and testing upon request by the FAA.  The  unmanned  aircraft  should  be  well  maintained  and  carefully
                                                               examined and tested before each flight. You should maintain an op-
        •  Report to the FAA within 10 days any accident that results in serious
          injury, unconsciousness, or property damage of $500 or more.  erating  manual,  keep  detailed  flight  logs  for  all  aerial  activities  and
                                                               promptly report any accidents, injuries and damages to the FAA and
        •  Conduct pre-flight inspections of the aircraft and control system to   your insurance carriers.
          ensure they are in good condition for safe operation.
                                                                 Proper insurance coverage is a critical piece of your risk management
        •  Ensure the aircraft continues to be properly registered as required   practices. In the past, most commercial general liability (CGL) policies
          by the FAA.                                          specifically excluded coverage for any liability arising out of the own-
                                                               ership, maintenance and use of aircraft. With the rapid growth of the
        The Evolution of Drone Rules                           commercial use of drones, however, many insurers are now willing to
                                                               add such coverage through a CGL endorsement. Such endorsements
          Part 107 of the Federal Aviation Regulations remains largely intact
        since its adoption in 2016. However, there have been changes in drone   can cover property damage and bodily injury caused by the use of the
                                                               aircraft as well as damage to or loss of the drone, its ground controls
        regulations over the past few years. And as drone technology continues
        to improve and flights become more common, further relaxation of re-  or its loads. Most CGL insurers will also offer personal injury coverage,
        quirements can be expected.                            including coverage for invasion of privacy, as an option.
                                                                 In today’s insurance marketplace you may be able to find dedicat-
          For  instance,  under  the  Operation  of  Unmanned  Aircraft  Systems
        Over People rule enacted in 2021, drones can, under certain circum-  ed commercial drone insurance policies. These are annual policies that
        stances, fly routine operations over people and moving vehicles not   provide legal liability coverage for property damage and bodily injury
        involved in the drone flights. Previously, pilots had to obtain an FAA   caused by your operation of a drone. Policies also typically cover the
        waiver to fly drones over people not involved in the operations.  cost of your legal defense should you be sued as a result of your drone
                                                               operations. This is a rapidly evolving coverage in the insurance industry,
          Note that drones flying over people cannot have exposed rotor parts   so have your agent or broker thoroughly investigate your options.
        that could cause lacerations should an accident occur. Also, drones can-  If you hire a subconsultant or other outside vendor to operate small
        not maintain sustained flight over any one person who is not part of
        the drone operations. Privacy issues jump to the forefront when flying   unmanned aircraft on your behalf, ask to be named as an additional
        drones over crowds or targeted individuals while collecting photos or   insured on their CGL or drone policy, and ensure they have adequate
        other data.                                            coverage limits. (typically $1 million to $5 million of coverage). Or, you
                                                               might be able to purchase your own non-owned aircraft coverage, ei-
          Under  Part  107,  drones  could  only  fly  during  local  daylight  hours   ther by endorsement to your CGL policy or as a standalone policy.
        (30 minutes before official sunrise to 30 minutes after official sunset)
        or during twilight when using approved anti-collision lighting. Now,                Finally,  the  use  of  drones  can
        drone pilots can fly their small unmanned aircraft at night. However.             also  result  in  professional  liability
                                                                                          (PL)  for  your  firm,  which  is  likely
        two conditions apply:
                                                                                          not  covered  by  your  CGL  policy.
          1) The remote pilot must complete an updated knowledge test or                  The  failure  to  perform  up  to  the
        online recurrent training that includes an operation-at-night section.            current standard of care regarding
          2) The drone must have approved anti-collision lighting that is visible         the use of drones, as well as design
        for three miles.                                                                  errors  or  omissions  made  due  to
                                                                                          the  misapplication  of  information
          Note that these changes in regulations are not considered blanket               gathered during the use of drones,
        approvals  and  some  restrictions  regarding  flying  over  crowds  or  at   can result in professional liabilities. Check with us regarding how your
        night still apply. That’s why it’s important to read and follow the current   current PL policy covers the use of small unmanned aircraft. A PL policy
        FAA regulations, available online at      endorsement may be needed to provide you with proper coverage. n

        www . LSA W. or g                                                                                         17
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