Understanding UAV Risk Management and Regulations

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This comprehensive guide provides essential information for risk managers dealing with UAVs, covering topics such as FAA regulations, industry growth projections, common uses of drones, FAA regulatory framework, potential liabilities, and insurance coverage issues. It highlights key areas such as safety certifications, operational limitations, commercial applications, and risk mitigation strategies in the rapidly evolving drone industry.

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Game of Drones Game of Drones: : What Risk Managers Need to Know What Risk Managers Need to Know to Keep Their Heads to Keep Their Heads When Dealing with UAVs When Dealing with UAVs Brendan C. Holt Saxe, Doernberger & Vita, P.C. Saxe, Doernberger & Vita, P.C. C. Lily Schurra

FAA Can Investigate THIS FAA Can Investigate THIS

An Industry Poised to Take Off: An Industry Poised to Take Off: FAA Sales Growth Estimates: Hobbyist drone sales could expand from 1.9 million in 2016 to 4.3 million in 2020 Commercial drone sales could increase from 600,000 in 2016 to 2.7 million by 2020. Drone Services Industry: Revenue could increase from $170 million in 2015 to $8.7 billion by 2025 Comparison to Auto Industry: From 1910 -1914 increase of 1.2 million cars on the road.

Uses: The Skys The Limit Uses: The Sky s The Limit Aerial imaging 3-D modeling and surveying Security of property and job site Scanning and detecting damages Real-time monitoring of project progress Emergency management / monitoring First Responders Municipalities Insurance companies

FAA Regulatory Framework FAA Regulatory Framework Aircraft Requirements FAA airworthiness certification not required Aircraft registration required Aircraft markings required Part 107 remote pilot certificate Requires passing of Initial Aeronautical Knowledge Test TSA background check Application process can take 4-6 weeks Carriage of Cargo Now allowed Maximum weight 55 lbs. Required preflight check of security of load Must meet all other operating limitations or have a waiver Visual Line of Sight (VLOS) Operator must be able to see aircraft at all times Night time operations prohibited Operational Limited Continued: Maximum altitude of 400ft above ground level No operations above 18,000ft Waivers Can waive some 107 limitations Must prove safety of operations and justification for waiver

Potential Liabilities Potential Liabilities Third-party Bodily Injury Third-party Property Damage Privacy Violations Data Breach Contractual Liability

CGL and Data Liability Coverage Issues CGL and Data Liability Coverage Issues CGL Coverage Part A Aircraft, Auto or Watercraft Exclusion 2. Exclusions CGL Coverage Part B Relevant Exclusions Data 2. Exclusions This insurance does not apply to: This insurance does not apply to: a. Knowing Violation Of Rights Of Another g. Aircraft, Auto or Watercraft Personal and advertising injury caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict personal and advertising injury . Bodily injury or property damage arising out of the ownership, maintenance, use or entrustment to others of any aircraft PII/Data d. Criminal Acts Exception to Exclusion g. This exclusion does not apply to: Personal and advertising injury arising out of a criminal act committed by or at the direction of the insured. p. Recording And Distribution Of Material Or Information in Violation of Law insured contract for the ownership, maintenance or use of aircraft (4) Liability assumed under any (4) Any federal, state or local statute, ordinance or regulation that addresses, prohibits or limits collecting, recording, sending, transmitting, communicating or distribution of material or information.

Other Policies & ISO Endorsements Other Policies & ISO Endorsements Drone Specific Policies Aviation/Aircraft Specific Policies New ISO CGL Unmanned Aircraft Endorsements: CG 21 09 06 15 Exclusion - Unmanned Aircraft CG 21 10 06 15 Exclusion- Unmanned Aircraft (Coverage A Only) CG 21 11 06 15 Exclusion - Unmanned Aircraft (Coverage B Only) CG 24 50 06 15 - Limited Coverage for Designated Unmanned Aircraft (Coverage Parts A and B) CG 24 51 06 15 - Limited Coverage for Designated Unmanned Aircraft (Coverage A Only) CG 24 52 06 15 - Limited Coverage for Designated Unmanned Aircraft (Coverage B Only)

Take Take Aways Aways Know what is (or isn t!) in your insurance program Make sure discrete lines of insurance align Tailor contractual risk transfer Insurance requirements Indemnity