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Insurance - Game of drones

image Lauren Allen, Vice President-Sales, BrookStone Insurance Group, Dallas, TX

AUSTIN - What do the U.S. military, Super Bowl LI, Texas Dept. of Public Safety, Austin City Limits Music Festival and the construction industry have in common? All have utilized drones to enhance the activity at hand. From search and rescue operations to documenting artistic performances to monitoring projects for safety and quality control, commercial drones (also known as “unmanned aircraft systems”) are becoming an increasingly predominant tool to ensure operational success.

 

    While the use of drones in the construction industry may not seem like an everyday occurrence, the FAA estimates that by 2018, over 7,500 small commercial drones will be used by general contractors and tradespeople, with most of the usage occurring on construction sites. Think about the benefits: surveying large project sites, inspecting dangerous or difficult to reach locations, creating aerial maps, and providing live video feeds of the job site to ensure adherence to safety protocol. Drones have the capability of completing certain tasks with significantly less risk than a human.
    But practical and cost benefits aside, it is imperative to consider the full gamut of risks associated with drone usage. Incidents of a drone running out of power, the operator losing control, or in some cases reckless operation can lead to destruction of property and/or medical injury to others. While not as prevalent, hackers have developed tools to interfere with GPS systems, which could lead to liability issues. And one of the most concerning issues when operating drones on a construction site is the type of imagery drones may capture when flying close to the borders of private property, which can lead to claims of invasion of privacy. To be protected, the proper amount of insurance coverage must be in place, and likely your current commercial general liability policy contains an exclusion that prohibits aviation coverage (yes, the FAA now includes drones in its definition of “aircraft”). Therefore, do not assume that your company is covered for drone activities.
    In its efforts to quickly adapt to the increased usage of drones, the Insurance Services Office (ISO) has issued endorsements to better clarify the coverage applicable to commercial drone use: the Unmanned Aircraft Exclusion (CG 21 09) and the Limited Coverage for Designated Unmanned Aircraft (CG 24 50). These endorsements, which focus on bodily injury, property damage, and personal and advertising injury, allow the insurance market to either exclude or include coverage for drone activities. Additionally, several insurance carriers have stepped up to the plate and now offer drone-specific policies with varying degrees of coverage, including both “owned drone” and “non-owned drone” coverage.
    When determining whether drone usage is right for your company, consider a few of the FAA’s regulations:

•    The drone must be registered with and approved for commercial use by the FAA;
•    Drone operators must be at least 16 years old, pass an initial aeronautical knowledge test/obtain a remote pilot airman certificate, and be vetted by the TSA;
•    The drone must weigh less than 55lbs and adhere to FAA regulations, including maintenance regulations; and
•    Drone operation must occur during daylight or during twilight hours, assuming there are running lights on the drone, and the drone must be in the visual line of sight of the operator.

    As the insurance world adapts to the integration of drones into the construction industry, it is important to establish and implement risk management strategies for drone activities. Always vet drone operators regarding their training and qualifications, and establish specific flight plans for drone usage on job sites. These tactics can both assist in mitigating the risks associated with commercial drone use and make the company more desirable in the insurance marketplace.
    The use of drones in the construction industry can lead to exciting new ventures and business successes. Ensure that your company is properly protected with the right insurance coverage and policy limits to safeguard your risks.

Lauren Allen is a licensed attorney in the State of Texas and the Vice President of Sales at BrookStone Insurance Group. She focuses on collaborating, innovating and delivering risk management plans tailored to her clients’ specific needs. She can be reached at 214-301-3333 or lallen@brookstone-group.com


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Kim Estes austineditor@constructionnews.net