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Insurance & Casualty Litigation

Drone Usage Integrated into Business Models

With the Notice of Proposed Rulemaking by the FAA for unmanned aircraft systems (UAS), more commonly known as drones, in February 2015, many industries are poised to integrate this technology into their business models. Media attention has focused on the entertaining notions of Amazon and pizza deliveries, but other industries, specifically the energy and insurance sectors, have positioned themselves to utilize this emerging technology.

Utility industries have traditionally used ground personnel and manned aircraft for inspection of electric transmission lines as well as gas lines and rights-of-way.   Insurance companies often send agents out to visually inspect the insured’s property.  Both industries have the need for real-time information for storm assessment, as well.

These operations are often risky and costly to business, and drones can help minimize these costs. In, 2014, the first utility company was granted a special airworthiness certificate by the FAA for experimental use of unmanned aircraft in the utility industry.

Stalling the Industry

However, with many industries excited to integrate this technology into their business models, it is important to consider the legal implications prior to purchase.

Additionally, operating drones for commercial purposes require FAA authorization.

When investing in drones, there are two routes to authorization – 1) special airworthiness certificate that authorizes companies to fly for purposes of research and development and the section 333 exemption, previously covered in our blog series.[1]

The proposed rules attempt to balance privacy concerns with public safety concerns. They are currently focused on small UAS and are fairly strict.  They include:  a weight limit of less than 55 pounds, including all onboard equipment and sensors;  it must remain within visual line of sight of the operator;  it can only operate during daylight hours;  and it may not fly over any persons not related to the UAS operation.  The proposed rules also indicate that the UAS operators would be required to obtain a UAS certificate issued by the FAA and pass a knowledge test, though the UAS itself would not need to be inspected by the FAA.

The proposed rules are also considering regulation for micro UAS (those weighing less than 4.4 pounds), traditionally used by the hobbyist.


[1] There is a third route for airworthiness certificates in restricted categories.  (under 14 CFR § 21.25(a)(2) and § 21.185)

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.