Unmanned Aerial Systems (UAS) aka Drones

The commercial use of Unmanned Aerial Systems (UAS), commonly known as drones is rapidly increasing.

The commercial use of Unmanned Aerial Systems (UAS), commonly known as drones is rapidly increasing. According to a report issued by the Aerospace Industries Association, UAS spending on drones will almost double over the next decade and is expected to generate $89 billion in the next 10 years.

The FAA estimates there could be as many as 7,500 small commercial drones in use in the United States by 2018. Companies across the country are also looking at a wide range of ways for drones to help them improve their business.

As of June 23, 2016 the FAA granted 5,309 exemptions to commercial UAS operators. This is a 15.6 percent increase over the total exemptions issued as of April, 2016 and a 120% increase over the last 9 months. In a January 22, 2016 the FAA reported that nearly 300,000 owners have registered their small unmanned aircraft in the first 30 days after the December 21, 2015 registration requirement.

Commercial Uses

Drones have a wide variety of commercial uses including:

• Real estate surveys
• General aerial surveying
• Agriculture
• Construction
• Film and television
• Utility inspection
• Environmental uses
• Search and rescue
• Emergency management
• Insurance

Experimentation of UAS for wider applications also continues. In one example, a drone is being tested as part of a control system for the operation of unmanned construction equipment.

Benefits

While there are many reports of misuses the benefits of UAS to businesses are expected to outweigh the detriments. One significant benefit is worker safety. Job safety is likely to improve as these units are used more often for high hazard inspection and surveying purposes. Equipped with a camera, recording capabilities, and fail safe technology, drones are being used for inspections of towers, stacks, bridges, tanks and vessels. With about the same level of quality for far less cost, drones can perform these inspections much faster than workers.

 Construction managers can also deploy drones for the purpose of monitoring safe work practices at remote jobsites and inspecting the quality of completed work.

Surveying and mapping large and sometimes dangerous areas can also be performed more safely with UAS. Examples include:

• Storms and hurricanes – monitoring the event and surveying post storm damage.
• Excavation, tunneling, and trenching sites.
• Investigations of catastrophic events such as:
• Landslides
• Earthquakes, Floods & Tsunamis
• Aircraft & train crashes
• Land surveying in extreme environments (temperature and terrain)

According to FAA’s Economic Analysis report, UAS are being used to perform high risk tasks such as close visual inspections of live flare stacks, flare tips, and live transmission lines and towers. Municipalities can employ drones to inspect a variety of infra-structures. In the US, approximately 300,000 bridge inspections are completed each year. If UAS were used instead of inspectors, the overall safety of the process would improve while lowering the cost of manpower and equipment. The average UAS bridge inspection currently costs $3,250.

Emergency personnel could use drones to respond to situations where people are in danger. The drones could aid in search and rescue operations or help find missing people in locations that are difficult to access. Upon FAA approval, drones could deliver supplies to disaster areas struck by catastrophes such as earthquakes, hurricanes, floods, and tornadoes.

The Wall Street Journal is reporting the use of drones by Hollywood. They enable filmmakers to take advantage of aerial cinematography and special effects without risk to their camera teams. A few broadcast news organizations plan to use drones to supplement helicopters. Drones allow new visual perspectives and enable access to areas that are currently inaccessible.

Insurance carrier opportunities

Some insurers are using drones for loss control inspections of roofs, bridges, and difficult to access damaged property. This provides information to claim adjusters and risk managers in a timely manner.

Claim departments are using drones to assist them with claims management. Workers' Compensation investigators are using drones for investigation and surveillance of suspected claimant fraud. The uses of UAS are proving to be more cost effective and efficient than traditional stakeouts. Drone cameras can be set to be activated when movement is detected and can automatically zoom in. However, there are some precautions that would need to be taken. When drones are used for surveillance, guidelines would need to be in place to assure compliance with applicable state privacy and trespass laws.

Drones can also be used for scene investigations to accurately depict conditions when accidents have occurred. These would include machine locations and conditions of premises. A drone could be used to take a photo of a faulty roof or a high piece of rusty scaffolding. This would protect the adjuster from inspecting a piece of equipment which contributed to the workplace accident.

Regulations

The FAA has issued Final Rule 107 on June 21, 2016 governing the commercial use of drones weighing less than 55 pounds. All owners of UAS for commercial use must register their units and receive a Section 333 exemption. When granted, the exception will define the permitted uses of the drones. Additional requirements are noted below.

Operational Requirements

• Unmanned aircraft must weigh less than 55 lbs.
• While FAA airworthiness certification is not required, the remote pilot must conduct a preflight check to ensure its safe operation
• The UAS must remain within the pilot’s visual line of sight and the person manipulating its flight controls or visual observer.
• Line of sight means the ability to see the UAS without the aid of any device or corrective lenses
• UAS may not operate over any persons not directly participating in the operation, under a covered structure, or inside a covered stationary vehicle.
• Daylight-only operations which include ½ hour before sunrise and after sunset provided that the UAS is equipped with anti-collision lighting.
• Must yield right of way to other aircraft.
• First-person view camera cannot satisfy “see-and-avoid” requirement but can be used as long as requirement is satisfied in other ways.
• Maximum groundspeed of 100 mph
• Maximum altitude of 400 feet above ground level or within 400 feet of a structure
• Minimum weather visibility of 3 miles from control station
• Prohibited operation in Class B, C, D, & E airspace unless approved by air traffic control.
• Only one operator per UAS at any time and a UAS cannot be operated from a moving aircraft or motor vehicle
• UAS cannot carry hazardous materials.
• Requires preflight inspection by the remote pilot in command.
• Non- US registered UAS can be used if they satisfy the requirements of part 375.
• A UAS can be used to carry loads provided that it does not adversely impact the flight characteristics or control
• Transportation of property for compensation or hire allowed provided that:
• The combined weight of the USA, attached systems, payload and cargo are < 55 pounds
• The flight is conducted within visual line of sight and not from a moving vehicle or aircraft; and
• The flight occurs wholly within the bounds of a State and does not involve transport between (1) Hawaii and another place in Hawaii through airspace outside Hawaii; (2) the District of Columbia and another place in the District of Columbia; or (3) a territory or possession of the United States and another place in the same territory or possession.

Operator Requirements

• A person operating a UAS must either hold a remote pilot airman certificate with a small UAS rating or be under the direct supervision of a person who does hold a remote pilot certificate (remote pilot in command) and be at least 16 years of age
• Foreign certificated UAS pilots will be required to obtain an FAA-issued remote pilot certificate
• Report to the FAA within 10 days of any operation that results in at least serious injury, loss of consciousness, or property damage of at least $500
• Conduct a preflight inspection, to include specific aircraft and control station systems checks, to ensure the UAS is in a condition for safe operation.
• A remote pilot in command may deviate from the requirements of this rule in response to an in-flight emergency.

The FAA also noted that most of the requirements may be waived if the applicant demonstrates that his or her operation can safely be conducted under the terms of a certificate of waiver.

In addition to these federal requirements, many states have enacted or are considering UAS regulations.

Summary

The commercial use of drones is rapidly expanding and enhancing operating efficiencies. They are also contributing to worker safety. Insurance carrier drones can support loss control, claims, and underwriting operations, contributing to bottom line results.

“The views and opinions expressed in this article are those of the individual author and do not reflect the views of Everest National Insurance Company and/or its affiliates.”

About the author: James Burkhart serves as the Head of Loss Control at Everest Insurance™ and he can be reached at (908) 604-3262 or james.burkhart@everestglobal.com

About Everest Insurance™: Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the U.S. and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest Reinsurance Company (Ireland), Limited provides reinsurance to non-life insurers in Europe. Everest National Insurance Company and Everest Security Insurance Company provide property and casualty insurance to policyholders in the 5 U.S. Everest Indemnity Insurance Company offers excess and surplus lines insurance in the U.S. Everest Insurance Company of Canada provides property and casualty insurance to policyholders in Canada. The Company also operates within the Lloyd's insurance market through Syndicate 2786. In addition, through Mt. Logan Re, Ltd., the Company manages segregated accounts, capitalized by the Company and third party investors, that provide reinsurance for property catastrophe risks. Additional information on Everest Re Group companies can be found at the Group’s web site at www.everestregroup.com.