ITLC Corner: Rules Set for Delivery Drones; Risk Remain

This story appears in the September 12 print edition of iTECH, a supplement to Transport Topics.

The federal government has at long last provided some regulatory guidance for the ballyhooed operation of delivery drones, but issues regarding the legal risks of their operation are far from resolved.

The first aviation regulations for commercial drones, unveiled in June by the Federal Aviation Administration, set a variety of limits on the small, unmanned aircraft. Among them:

Joe Howard

• Top speed of 100 mph

• Weight limit of 55 pounds

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• The operator or an observer must keep the drone in sight at all times

• Daytime-only deliveries, save for a half-hour before sunrise and a half-hour after sunset for drones equipped with anti-collision lights.

• No flights near airports or overtop of people not directly involved in the drone’s operation

• Maximum altitude is 400 feet above ground level, or if operating above that level, within 400 feet of a structure.

• Drone operators must be at least 16 years old and hold an FAA “remote pilot” certificate or be in the presence of someone who does.

• Certificates can be obtained by taking an aviation knowledge test at a government- approved testing center. Pilots of manned aircraft can obtain a certificate by taking a test online.

• Applicants must submit to a federal background check.

Despite this long list of rules — and this is but a sample — there are a litany of legal and liability risks that apply to drone flights. In a detailed evaluation of those risks, the law firm of LeClair Ryan outlined in a report how drone operations in close proximity to people and structures leave the door open for legal troubles. The firm broke down the most significant risk areas into three categories: drone/person interactions; drone/property interactions; and lost drones.

LeClair Ryan suggests that drone operators start with an insurance policy that covers drones, especially since a drone accident could give rise to liability similar to a traffic accident.

The system of laws in place for cars, trucks and other transportation equipment — which the report notes took decades to develop — are based on the idea of negligent operation of vehicles. With the risks associated with drones, their operation should be viewed as “analogous to buying and operating a truck or a truck fleet,” according to LeClair Ryan.

Insurance carriers are starting to develop policies that cover drones, but most general commercial liability policies specifically exclude them. Drone owners and operators should confirm that they have the necessary coverage required for their operations. Contractors operating drones for a business should consider indemnification and additional insured provisions.

The key reasons center on the most common problems that could arise from drone operation, which include:

• Drones colliding with and/or injuring a person

• Drones damaging property

The threat of drones injuring people “is the one that everyone thinks of when discussing drone liability,” the report said. “Liability arising from a drone contacting a person, or even affecting an individual in a non-physical way, is likely to be the largest source of liability facing insurers. Not only will the severity of the claimed injuries increase over time … but the overall rate of claims for damages arising from people interacting with drones will go up.”

However, this threat may also be easier to mitigate, since FAA rules prohibit operation of drones over anyone that is not participating directly in the operation. “The risk of drone/person interactions will attract early attention, but the risks of this may be the easiest to manage,” the report said.

Incidents involving drones and property arguably are a much broader issue, as drones can conceivably strike — for example — other aircraft or vehicles, buildings, animals and power lines. And should drones grow larger (without exceeding FAA weight restrictions), the opportunity for these types of incidents could increase. Commercially available drones cannot yet detect and avoid obstacles, but many can be programmed with a safe-landing zone that they will automatically fly toward in the event of a loss of battery power.

While these safe-landing zones can help prevent drones from crashing from the sky, it introduces the challenge of ensuring that they avoid collisions on the way to these pre-programmed destinations. Handling these situations is a key area where pilot training can help.

The required training and certification for drone pilots are not unlike programs that have existed for years for truck drivers. And just as veteran drivers can help new hires, companies that operate drones could have a licensed pilot either on staff or available to consult operators who still are learning the ropes. Going a step further, companies could establish minimum performance standards to help assess pilots’ aptitude.

“With some understanding of how drones work and how organizations expect to use them — by drawing from experience and the liability risks involving aircraft operations and automotive fleet operations — organizations can take some precautionary measures to manage liability risk,” LeClair Ryan said.

Joe Howard, information manager for ITLC, is a former editor at Transport Topics. He can be reached at jhoward@trucking.org.