By Leta Finch, National Practice Leader, Higher Education for Aon Risk Solutions.
Colleges and universities have been researching and developing drones in laboratories for over twenty years. They are now in the marketplace and used for many purposes including agricultural, environmental, and climate research; academic study; and, of course, military purposes. When the government allows their use for commercial purposes and increased recreational opportunities, the possibilities appear endless.
Colleges and universities prefer using the term “unmanned aerial vehicle,” or “UAV,” rather than drone. The Federal Aviation Administration (FAA) favors the term “unmanned aircraft system,” or “UAS.” Whether called a UAV, UAS, or drone, they are all unmanned, radio-controlled aircraft piloted from the ground. Because of its common usage, the term “drone” is used herein.
The FAA (1) regulates the licensure and use of drones, with the exception of model aircraft. Its authority includes public colleges and universities, which made up nearly a third of all applicants seeking FAA authorization in 2013.
The FAA has approved commercial use of drones in very few cases. Because of demand, Congress has ordered the FAA to issue national rules legalizing drones for commercial purposes by September 2015. The rules will most likely focus on the safety of drone technology, operator certification, and mitigating airspace congestion. Proposed rules were issued earlier this month. In summary they state:
- Operators will have to pass a knowledge test and be vetted by TSA
- Operators will have to take a recurrent test every 24 months and be at least 17 years old
- Operations must be done in daylight only
- Operators must be able to see drones at all times without use of visual aids (except glasses/contacts)
- Drones can only fly under 500 feet and no faster than 100 mph
- Cannot operate over people
- Visibility has to be over three miles to operate
The FAA has jurisdiction over the national airspace, which means that states have limits on how they can regulate unmanned aircraft. Twelve states, however, have passed limited laws on the use of drones, and seven states have criminalized their use for non-government surveillance.
There are three types of unmanned aircraft systems: model, civil, and public aircraft.
Model Aircraft
Generally, the FAA limits operations for hobby and recreational use to aircraft weighing a maximum of 55 pounds, unless otherwise certified, and that flies below 400 feet, away from airports and air traffic, and within sight of the operator. Model aircraft cannot be used for commercial purposes, and the use of any other aircraft requires FAA authorization. (2)
In 2014, the FAA published its interpretation of the statutory rules for model aircraft. The FAA interprets the rules to allow it to take action against model aircraft users who operate their aircraft in a manner that endangers the safety of the national airspace system. In the notice, the FAA explains that this enforcement authority is designed to protect users of the airspace as well as people and property on the ground. This enforcement authority is exemplified in the case of the FAA v. Raphael Pirker. The University of Virginia wanted to shoot a promotional video of its campus and hired a firm that subcontracted Raphael Pirker, who uses drones in his photography. He used his drone to take aerial videos of the campus, and, once discovered, the FAA fined him $10,000. An appeal is pending.
Civil UAS (3)
Civil operators of unmanned aircraft can get approval to operate drones by obtaining a Special Airworthiness Certificate from the FAA. This experimental-use certificate precludes carrying people or property for compensation or hire. However, civil operators can petition for an exemption to these stipulations under Section 333 of the FAA Modernization and Reform Act of 2012.
Public UAS
Certificates of Authorization (COA) are available from the FAA for public entities that wish to fly a drone in civil airspace. Common uses include law enforcement, firefighting, border patrol, disaster relief, search and rescue, military training, and other government operational missions. The FAA issues many of these COAs, including those for research projects conducted by public institutions, for a specified period of time.
Suggestions for Operating Unmanned Systems
The following suggestions from the FAA are intended to encourage the development of safety policies and procedures:
- Operators should be trained in the use of the drone in which they will operate.
- All flights should be conducted only as authorized by the FAA. Any institution operating drones will also want to determine which laws, if any, apply in the state of operation.
- Operators should be mindful of the safety of people and risk of property damage and aware of potential failure modes for their systems.
- All built-in safety features should be tested before flying.
Insurance Considerations
Insurance needs will depend upon the type of aircraft, its intended uses, and whether FAA authorization or certification is required to operate it.
Current general liability policies may cover the use of model aircraft weighing less than 55 pounds. However, this coverage depends on the policy form, and certain types of research may require additional coverage.
Institutions would need insurance for bodily injury (BI); property damage (PD); and personal injury, to protect from, for example, privacy violations. If the insured will assemble, house, or transport the drone, it may need property coverage.
There are concerns that can impact these insurance coverages including privacy issues and unlawful use.
Many policies include exclusions for unlawful use if, for example, the college or university should have FAA authorization to fly a drone, but does not. Another concern is the potential of flight controls being breached by hackers.
Privacy concerns may also stem from drone operation. Allegations can arise, for example, from the use of aerial photography in or around residence halls and nearby residential neighborhoods.
The major aviation markets have policies available to address most of these coverage needs.
When considering coverage, carriers will want to know such things as the drone’s purpose, its takeoff and landing locations, the population of the areas in which it will operate, and its flying altitude. Scope of coverage will further depend on storage facilities, assembly procedures, and any physical size, weight, and onboard equipment specifications.
Drones are a fast evolving technology, and we anticipate seeing enormous growth in their usefulness and associated risks in the near future. As with all risk issues impacting colleges and universities, Aon will follow this matter closely.
Resources
(1) For our Canadian readers, please refer to Transport Canada’s website for regulations for operating drones.
(2) Page 6 of the following website provides the FAA regulations for model aircraft use.
(3) For more detailed information on UASs, visit https://www.faa.gov/uas/.
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