Update on Regulations, Legal Aspects and Insurance for Drones

In June, the Federal Aviation Administration (FAA) released long awaited final rules for the commercial use of small Unmanned Aircraft Systems (UAS). The new Small UAS Rule (14 CFR Part 107) will be effective August 29th and is applicable to UAS that weigh less than 55 lbs. at takeoff.

As provided by the new ruling, government entities may choose to operate under the new commercial use rules and will now have the two following options for legal operation of UAS.

If a government entity is already authorized to operate under a COA, additional immediate required action is on a case-by-case basis. In some cases, an entity may choose to begin operating under the new rule because it may allow a broader scope of operation than some COAs (such as those limited to training operations or limited airspace). In other cases, an entity may already have broader authorization under a COA and choose to make no immediate changes.

An option to apply for a Certificate of Waiver (CoW) under small UAS rule (14 CFR part 107) will also be available which will allow for operation that deviates from the basic rules if approved by the FAA. Flying at night, flying from a moving vehicle or aircraft, and flying over crowds are a few of the types of operations that can be authorized under a waiver. These waivers may eliminate many of the scenarios in which an emergency COA was needed in the past. The FAA approval process for the waivers takes up to 90 days.

As part of the final small UAS ruling, the FAA determined that certain legal aspects concerning small UAS use is best addressed at the state or local level, including privacy issues, and thus didn’t include any provisions that would preempt any laws. The FAA also does not have the authority to impose any mandatory liability insurance requirements for the operation of UAS as part of their regulations, so the decision to maintain insurance coverage remains at the discretion of the UAS owner.

Standard property and liability insurance policies typically exclude aircraft, which includes drones. However, the ACCG’s Property and Liability Program (ACCG-IRMA), offers liability coverage for the operation of drones via endorsement for an additional contribution if the operation is in compliance with FAA rules and guidelines.

In order to be eligible for the Unmanned Aircraft Endorsement, a separate, brief application detailing the usage, specifications, and operators of each unmanned aircraft is required along with a copy of your FAA Certificate of Authorization (if applicable). Liability coverage will be available for any FAA-approved unmanned aircraft weighing 55 lbs. or less up to your current limit of liability with some further restrictions based on size for liability limits greater than $3,000,000. Physical damage coverage for the unmanned aircraft itself is available by individually scheduling it on the equipment schedule on file with ACCG-IRMA. If you should have any questions about this adding this coverage, please call Matt Autry or Glenda Williams at 1-800-295-8179.