Drones - NAMIC - Home · Aircraft Registration and aircraft markings Operator required to pass an aeronautical knowledge test and obtain an unmanned aircraft operator certificate

Drones Monday, September 28, 2015

Tom Karol General Counsel Federal Affairs NAMIC Washington, DC Tom Karol is NAMIC’s general counsel for federal affairs, representing NAMIC in Washington on legislative and regulatory issues impacting property/casualty insurance companies. Tom is also the leader of NAMIC’s Investment Services Practice. Tom has extensive legal, regulatory, and operations experience with major financial services companies, law firms, regulatory agencies, and Congress. Tom was a leader in Deloitte’s Global Financial Services practice, a supervisory principal for a broker dealer, with the Securities and Exchange Commission Division of Enforcement and with the U.S. Senate Committee on Governmental Affairs. Tom is recognized as an authority on insurance issues when it comes to unmanned aerial systems/drones and has authored NAMIC’s whitepaper “Unmanned Aerial Systems/Drones – Regulation, Liability, and Insurance Requirements” and “A Compendium of State Laws and Proposed Legislation Related to Unmanned Aerial Systems/Drones” for the National Telecommunications and Information Administration Multi-Stakeholder Meeting on Privacy, Transparency, and Accountability Regarding Commercial and Private UAS.

Three Session Ideas Tools or tips you learned from this session and can apply back at the office.

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Drones & Insurance –Trends & Developments

Unmanned Aerial Vehicles “Drones” • There has been a proliferation of

UAVs/drones in the U.S.

• Recreational – Amazon selling 10,000 per month

• Commercial uses include insurance, agriculture and many other policyholder businesses

• The FAA presently prohibits commercial use, but has issued new proposed rule

• These FAA rules are a good first step that need much work, and may lead to insurance requirements

2015 Connect Differently - Karol Page 1 of 22

Drones Have Been

Around For a Long, Long Time


As early as World War I, the Navy and the Army experimented with aerial torpedoes

and flying bombs

Origin of the Term “Drone”

“The Queen Bee” was a 1935 U.K. radio-controlled target aircraft used for anti-aircraft

gunnery practice


U.S. Adm. William H. Standley saw a British demonstration of the Royal Navy's DH 82B Queen Bee and began developing

something similar for the U.S. Navy

The Navy adopted the name 'drone' to refer to these aircraft in homage to the Queen Bee, as a drone could only function when controlled by an operator on the ground or in a "mother" plane

UAVs Were Thought To Be Unreliable And Expensive Toys

• The attitude changed dramatically with the Israeli 1982 use of UAVs to destroy many Syrian planes with minimal losses

• The U.S. had great success with the Predator in the Balkans in 1995, Iraq in 1996 and later in Afghanistan


Practical UAS UsesThe USGS partnered with Boise State University and the University of Idaho to use UAS to gather data on endangered species

NASA used UAS to collect very low altitudeairborne measurements of greenhouse gases in California and Nevada

Researchers from the University ofAlaska used UAS to plan theemergency delivery of supplies to a Russian oil tanker stuck in the ice

Mesa County Sheriff’s Office uses UAS in search and rescue missions

The Important Cultural Commercial Triumphs of UAS

• Delivering beer pizza and tacos

• TGIF’s Flying Mistletoe

• The Golden Globes


UAS - Insurance Use

• Inspections for Underwriting

• Keeping workers safe as drones take risk on

• Damage Assessment

for Claims

• Catastrophe Management

Responding Quickly To A Catastrophic Event Is Critical To Disaster Recovery Efforts

UAS evaluation, analysis and measurement can identify access points, determine losses, pinpoint areas that require special attention or equipment and scope damage


Insurance FOR Drones

• Only 20 insurance companies now write aircraft product liability policies – up from just nine a few years ago

• Insurance for drones and drone-related operations may someday become routine

• Challenging for insurance companies - lack of regulation and loss history makes it hard to develop policies and pricing

UASs – What Could Possibly Go Wrong?

• Interference with Commercial Aviation

• Insurers are insuring and will insure commercial and recreational UAS use

• UAS laws, regulations and liability standards are unclear and developing

• Insurers need UAS laws, regulations and liability standards that best enable use and provide effective and appropriate insurance for UAS use


FAA already has a very serious day job of overseeing the safety of 68,000 domestic commercial flights a day, the design of every part of the airplanes making those flights, and the operations of the continent-wide air traffic control system.

Why the FAA is Concerned • Drone crashes at White House - January 2015

• Drone crashes near German Chancellor Angela Merkel - September 2014

• Two commercial airliners reported spot a drone while on approach to JFK Airport

• California’s San Bernardino County are offering $75,000 for information in the search for drone operators who have interrupted firefighting efforts

• Drone injures bystanders in Virginia crowd – fall 2013 at the Great Bull Run, injuring several people in attendance

• In Washington state, a news helicopter was covering a fire when the pilot noticed a drone flying too close for comfort

• Drone nearly crashes into Airbus A320 - July 2014, a drone narrowly missed ca plane at London's Heathrow airport

• Drone caught carrying drugs near the border -January 2015, a drone carrying methamphetamine crashed in Mexico near the US border

• Drone flies over Bank of America Stadium during a Carolina Panthers football game in Charlotte, North Carolina

• Drone flies over Comerica Park when the Detroit Tigers were playing against the Baltimore Orioles in a Major League Baseball game

• Drone crashes into Grand Prismatic Spring in Yellowstone National Park

• Drone attacked by hawk - a drone met its demise at the talons of a red-tailed hawk flying in a Cambridge, Massachusetts park

• A man in Kentucky is arrested for shooting down a drone that he claims was hovering above his backyard


FAA - Pilot reports of unmanned aircraft : 238 sightings in 2014, more than 650 at 8/9/15

FAA Commercial UAS Proposed Small UAS Regulations

Eliminates the recreational versus commercial use distinction

Operations - No flying directly over persons, Only during daylight, No faster than 100 mph or higher than 500 feet, and require FAA Aircraft Registration and aircraft markings

Operator required to pass an aeronautical knowledge test and obtain an unmanned aircraft operator certificate

Visual line-of-sight

Small-UAS operations must give right of way to all manned aircraft always consider the safety of people, first and foremost


21 Companies Have FAA Exemptions For Insurance Related Use

• Five insurance companies16 service companies

• 15 of the 21 use the DJI Phantom– $500-999 on Amazon.com

– Camera/GoPro is extra

– Battery lasts 10-15 minutes

– Height – 120 m

– Range – up to ½ mile

Drones and Privacy NAMIC is working with other stakeholders at the U.S.

Department of Commerce and National Telecommunications and Information Administration (NTIA) initiative to create drone

privacy “best practices”


Readily Available Firmware

• Waypoints: Record a flight path, then tell your drone to fly along the same path repeatedly while you control the camera and orientation.

• Point of Interest: Tell your drone to automatically revolve around a designated object, person, or place in a perfect circle.

• Follow Me: Tell your drone to follow you, and it automatically flies and keeps you in the camera's view wherever you go.

• Course Lock: Fly along a set path by setting all flight controls to directions relative to its current heading.

What’s New?


• Lily - throw-and-

shoot camera • You throw it in the air

to start shooting • Flies itself • Uses GPS and

computer vision to follow you around

• 2.8 lbs. – 10” wide, 3” high

• Shoots HD pictures and videos

PocketFlyer• Operating Range: 250 ft

• Vehicle Weight: 80 grams (the weight of 16 nickels) • Case Size: Fits into cargo pants pocket

• Mission Duration: 2 hours of flight , Several days in perch mode• OCU: Tablet or Smart Phone – full video capability


PowerUp 3.0 – a lightweight guidance-and-propulsion system, powered by a dime-size

battery, which clips onto origami aircraft and connects to iPhones

APPROVED

Not All Developments Are Supportive


DroneInjuriesLawyer.com• How Much is My Drone Personal Injury

Lawsuit Worth?

• Drone Invasion of Privacy Lawsuit - Do I have a Drone Invasion of Privacy Case?

• Drone Spying Lawsuit: What Will Help Make Your Case

• Drone Insurance Claims: is there such thing as drone insurance?

• Is My Drone Insured Under my Homeowner's Insurance Policy?

• How Do I Make a Drone Insurance Claim If I've Been Hurt?

• How Much Drone Insurance Coverage Should I Get?

Droners.io – Uber for UAS? • Client specifically releases and forever discharges the Droners.io from and

against all actions, causes of action, claims, suits, debts, damages, judgments, liabilities, rights, contracts, obligations, and demands, whether now known or unknown, liquidated or unliquidated, that any of the Client has, may have, has asserted, or could have asserted, of any nature arising out of or in any way connected with any disputes Client may have with any other User of the Site.

• Pilot specifically releases and forever discharges the Droners.io from and against all actions, causes of action, claims, suits, debts, damages, judgments, liabilities, rights, contracts, obligations, and demands, whether now known or unknown, liquidated or unliquidated, that any of the Pilot has, may have, has asserted, or could have asserted, of any nature arising out of or in any way connected with any disputes Pilot may have with any other User of the Site.


UAS Regulation – An Example of the Complexity

• Curtilage – the property area in which you have the legal right to privacy

• An important legal concept that applies to many insurance issues

• Other persons cannot impose themselves on your curtilage – Trespass, torts

• Nor can the Government – privacy, limiting your enjoyment and use

From ancient times, the law was simple and clear - if you owned a piece of land, you owned everything above and

beneath it, from heaven to hell –Cujus solum ejus est usque ad coelom.


1946 - U.S. Government recognized declared a public right of transit in navigable airspace and national sovereignty in

that airspace. “The air is a public highway, as Congress has declared.

U.S . NAVIGABLE AIRSPACE

1986 - Supreme Court says police photos from 1,000 feet were permissible as they were made in

“public airspace”


1989 - Supreme Court says police photos from 500feet were permissible as they were made in

“public airspace”

Today - FAA claims UAS jurisdiction “from the ground up”

FAA Small UAS proposal is under 500 feet.

????


Curtilage Complexity

• What empowers the federal government to control how you can fly a commercial UAS 10 feet above your yard? One foot?

• If it’s “public space”, can your neighbor fly her UAS 400, 100, 10 or 5 feet over your yard?

• Can the police fly a UAS 400, 100, 10 or 5 feet over your yard? How about CNN? Can they record your image as they fly?

• Can Amazon fly 10 feet over your yard to deliver a package to you? Can Amazon fly 10 feet over your yard to deliver a package to your neighbor?

• Do you have to get out of its way? Does it have to get out of your way? Can you whack any of those UASs with a 9 iron?

State Laws

• 28 state laws enacted

• 20 more passed by State Legislature

• 111 more considered by State Legislature

• 20-50 Municipal and Local provisions passed– Preemption Issue


Local UAS Regulation???• FAA is the recognized aviation authority

– Traditionally most air travel is interstate

• But UAS are low, short and within one mile

Oregon Law - 837.380 (2013)• A civil action for trespass may be brought against

any person that operates a drone flown at a height of less than 400 feet over the property

• A prevailing plaintiff may recover treble damages and attorney fees

• The Attorney General of Oregon may bring an action or claim for relief alleging nuisance or trespass arising from the operation of a drone in the airspace over this state


A Key Regulatory Issue - The Public is Not Comfortable with UASs

Recent Surveys:

• 90% - concerned that private UASs will violate other people’s privacy

• 75% - private UASs can pose a danger to aircraft and people on the ground

• 63% - it would be a change for the worse if personal and commercial drones are given permission to fly through most U.S. airspace

The Public is Not Comfortable with UASsChubb Group Survey:

• 73% - worried a drone may could crash into their house

• 55% - worried that drones could poke out an eye or cause other damage

• 78% - concerned that America could become a surveillance state

• 60% - concerned drones could photograph family members

• 50% - drones create risks about hacking into wireless networks

• 34% - worried that drones could steal things


Summary

• UAS Commercial Use Will Grow

• UASs Will Be Important To And For Insurance

• UAS Federal Regulations Will Be Made

• Forthcoming UAS Federal and State Regulations Will Impact Many Areas Of Insurance And Liability

• Many Groups Are Concerned And Advocating

NAMIC has published and extensive review of the drone regulation and the related insurance issues, available at http://www.namic.org/pdf/15memberadvisory/150226_drones.pdf

You can also contact the author, Tom Karol, NAMIC’s General Counsel Federal at [email protected]


NAMIC has produced a Compendium of State Drone laws for the National Telecommunications and Information Administration, also available at http://

You can also contact the author, Tom Karol, NAMIC’s General Counsel Federal at [email protected]

Questions?

Thank you

Tom KarolGeneral Counsel Federal National Association of Mutual Insurance Companies122 C St NW, Suite 540Washington, DC 20001Direct: [email protected]

The difference is in the experienceSM


Documents

Drones - NAMIC - Home · Aircraft Registration and aircraft markings Operator required to pass an aeronautical knowledge test and obtain an unmanned aircraft operator certificate