Tag Archives: aviation

Drones: The Risk from Above

At the 2015 Advisen Casualty Insights Conference, the topic of drones and risk management concerns related to them was discussed by Justin Green, Aviation Attorney at Kreindler & Kreindler and Thomas Klaus, Vice President at Willis Aerospace.
Drones currently have widespread application in a variety of industries:

FAA Approves Drones for Real Estate photoLaw enforcement uses them for surveillance and search.
The insurance industry uses them to look at unstable roofs.
Journalists are using them for photography in war zones.
The oil and gas industry uses them to inspect pipelines.
The motion picture and television industry is now using drones for most overhead shots instead of helicopters.

The use of drones is very well established in government contracting, military, insurance, oil and gas, and the boarder patrol. Drone usage is rapidly expanding in other industries because there are many benefits to using them. In many ways, drones can be much safer than the use of helicopters in instances such as searching a forest fire zone.  A drone can eliminate putting people at risk in dangerous situations while also providing the necessary information.

Currently there are no FAA regulations around the use of drones and the FAA is trying to catch up with this quickly-growing potential exposure.  The FAA has indicated that no commercial use of drones is allowed without special permission. Amazon was just approved to start testing drones for commercial use after several months of trying to secure this authorization. What is yet to be determined is, once FAA has regulations in place, how will these regulations be enforced?  There is also significant concern around potential terrorism risk using drones.  While the FAA can regulate commercial use of drones, the private use is very difficult to regulate. For example, the person who crashed a drone on the White House lawn was not charged because the individual did not violate any laws.

Secret Service is looking into developing laws to prevent this from happening in the future.
Insurance exposure for drones is similar to aircraft exposure, which focuses on damage caused to people and property on the ground.

But there can also be privacy exposures like paparazzi using drones to get pictures and videos. Coverage for the risks associated with drones is usually placed in a general liability policy with an endorsement, but the aviation insurance industry is also in the process of customizing policies to include drones.