Date: April 2018
Unmanned aircraft systems (UAS), commonly referred to as “drones,” have the ability to aid government entities in many ways: mapping, surveillance, and search and rescue to identify a few. However, as with any new technology, the use of drones does not come without risk.
For example, a drone could:
- strike property and damage it (worst-case scenario, a drone could collide or interfere with a piloted aircraft).
- subject the government entity to suit alleging invasion of privacy when used for surveillance or mapping.
- subject the entity to potential fines and penalties if not operated pursuant to federal regulations.
Key Regulations of Drone Use
Commercial and local government drone use is regulated by the Federal Aviation Administration (FAA). In 2016, the FAA issued new guidelines for drone usage. Public entities operating a drone must either continue to obtain a certificate of authorization (COA) or have the operator obtain authority under the regulations commonly referred to as Part 107.
Applying for the certificate of authorization requires government entities to discuss and identify: 1) the qualification of drone operators; 2) purpose of drone use; and 3)place of drone use. The COA only applies to those drones being used for a government function.
Government function is any activity undertaken by a government, such as national defense, intelligence missions, firefighting, search and rescue, law enforcement (including transport of prisoners, detainees and illegal aliens), aeronautical research, or biological or geological resource management.
If a government entity would want to use a drone for a purpose other than a “government function” as defined, the operator would need authority under Part 107.
A COA will either allow drone use within a defined block of airspace for a specific purpose and may include special allowances unique to the proposed request. Or if it is a “blanket COA,” it generally permits nationwide flights in Class G airspace at or below 400 feet with some restrictions/bans from airports, night time flight and operation over people and buildings.
If the government entity seeks to operate under Part 107, it will need to follow all of those appropriate rules and regulations. Generally, to operate under Part 107, the individual operating the drone will need to obtain a “remote pilot in command” certification.
Like with the COA, there are limitations and restrictions to drone usage, such as the UAS must remain in visual line of sight (VLOS); daylight-only operations (or civil twilight); maximum altitude 400 feet above ground level or if on structure higher than 400 feet, within 400 feet of structure to name a few.
Develop Policies for Managing Risks of Using Drones
Any government entity that seeks to operate drones should create the appropriate policies and procedures regarding their use. It should also consider identifying operator qualifications to ensure that the operators are fully versed in the appropriate federal or state regulations.
Renting, Contracting Considerations for Drones
If a government entity leases (rather than owns) the drone and operates it, it still may need to obtain the appropriate authority to operate it.
However, government entities may avoid the need for obtaining a COA or Part 107 licensure by contracting with a private commercial drone operator. When contracting with the commercial drone operator, the government entity will want to require and verify that the operator has either Section 333 exemption from the FAA or authority under Part 107. Without one of these, the operator may not legally operate the drone.
Also when entering into a contract, the government entity should pay special attention to insurance requirements, specifically whether the policy covers aviation activity or whether specialty coverage should be required. It should also ensure the defense, hold harmless and indemnification provisions are broad enough to address the unique risks associated with drone use are addressed and all risk appropriately transferred to the private operator.
MCIT Coverage and Drone Use
If an MCIT member uses a drone for official government business, MCIT coverage would respond as follows:
- Property: MCIT provides coverage for the physical damage to a member’s drone under electronic data processing (EDP) section if the drone is scheduled. Failure to schedule results in no property coverage.
- General Liability: Most claims for property damage and bodily injury caused to others are excluded under the aviation activity exclusion. However, MCIT provides coverage for physical damage and bodily injury caused to a third party by a member’s drone if the drone is being used for specified law enforcement activities, such as search and rescue operations, criminal apprehension and public safety actions to address immediate threats to human life or property.
- Public Employees Liability: MCIT provides coverage for claims alleging a wrongful act (violation of civil rights) arising from a member’s use of a drone. This coverage is subject to standard exclusions, such as claims alleging an intentional act or malicious or criminal act.
Generally, failure to operate the drone pursuant to FAA regulation or for personal use may jeopardize MCIT coverage.
Drone technology may provide efficiencies and benefits to government entities. However, failure to manage the risk could have potential significant risks/damages for the government entity. Government entities will want to ensure compliance with applicable rules and regulations, and ensure operators have requisite skills and training.
Members who have questions about drones related to MCIT coverage or their risk management can contact their MCIT risk management consultant at 1.866.547.6516.