FAA Introduces New Regulations for Commercial Use of Drones

September 22, 2016| Von Ridge Muhly | General Liability | English

Region: North America

The much-anticipated U.S. regulatory framework relating to how businesses can use small-sized unmanned aircraft systems (UAS), commonly known as drones, came into force on August 29.

Federal Aviation Regulation Part 107, which concerns UAS weighing less than 55 pounds, is geared toward routine commercial drone use and could have an impact on some of your commercial accounts.

Part 107 was created to respond to the huge increase in usage of commercial UAS’s. Up to this point, a commercial entity had to have a FAA 333 Exemption to legally operate a UAS. Part 107 will retain many of the rules and regulations set by the FAA 333 Exemption. For example, commercial UAS operation must take place within visual line of sight of the operator and the maximum permitted groundspeed for a UAS is 100 mph. Flight is not permitted directly over “any non-participating person."

However, there are notable amendments that cut across current requirements. For example, the person flying a UAS must be at least 16 years old. Instead of a pilot’s license, a person flying the UAS is only required to have a remote pilot certificate with a rating for flying a small UAS (or be required to be directly supervised by someone with that certificate). Although Part 107 still requires that commercial drones remain below 400 feet above ground level, a provision allows them to operate higher than 400 feet above ground level when operating within 400 feet of a structure.

A waiver will be required for operations not falling within the conditions outlined by Part 107. That includes operations from a moving vehicle, near an aircraft or directly over non-participating people; operating multiple UAS; non-daylight operations; and minimum visibility and distance from clouds.

Inevitably, Part 107 will result in more drones in the skies; as a result there will be more privacy considerations since many drones have mounted cameras. As part of a privacy education campaign, the FAA will provide all UAS users with recommended privacy guidelines as part of the UAS registration process. The FAA will also educate all commercial UAS pilots on privacy during their pilot certification process and will issue new guidance to local and state governments on such issues.

Part 107 acknowledges that certain legal aspects concerning UAS are best addressed at state and local levels; for example the final rule recognizes the authority of states and municipalities to regulate drone take-off and landing. The rules also recognize that other local statutes may apply to UAS operation, such as privacy issues.

With more drones in the skies, the liability potential for Bodily Injury, Property Damage and Personal Injury has increased. It is imperative that the insurance industry understand the exposures and underwriting issues. The challenge is that changes in drone regulation make this somewhat of a moving target. Gen Re is working to stay current and we encourage you to do the same.

If you or your insureds are interested in learning more about state regulation or for the FAA’s summary of small unmanned Aircraft Rule, the following websites might help:

  1. National Conference of State Legislatures.
  2. "Summary Of Small Unmanned Aircraft Rule (PART 107)," FAA News, June 2016.


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