UNMANNED AERIAL VEHICLES (UAV) IN THE CONSTRUCTION INDUSTRY

John Babel, CRISXL CATLINNORTH AMERICA CONSTRUCTION

Michael Kennedy, Esq.General CounselAGC OF AMERICA

Ernest Brown, Esq., PEPartnerSMITH CURRIE & HANCOCK LLP

Learning Objectives

– UAS Technology & Applications.

– Proposed FAA Rules & AGC’s Response

– Legal, insurance & risk management strategies

– UAS safety planning & checklist

Definitions

• Drones

• UAS vs. UAV

• sUAS

• NAS

• LOS, VLOS

• FPV vs. camera view

• “Hobbyist” vs.

commercial use

• National Airspace System

• ATC

• NOTAM

• Fly-away, Geo-fence

• AGL

3

UAS Categories

Fixed Wing

• Fixed-wing UAS’s can stay aloft longer (1 hour or more)

• Specialized payloads for mapping and survey that require

longer flight times

UAS Categories (Cont.)

Vertical Take-off and Landing (VTOL)

• Great for shorter missions where it is helpful to get close to the target.

• Most Construction Applications will use VTOL

It’s not just visible light…

UAS Applications

UAS Applications

• Inspections (e.g., bridges, pipelines, power)

• Survey, digital mapping (DTM), utility route mapping

• 3D LiDAR mapping

• Environmental surveys

• Documenting existing/baseline conditions

• Building envelope/QC inspections/FLIR surveys

• Documenting as-built conditions

• Traffic control inspections

• Collection of IH data (e.g., work in Petrochem facilities)

• Mining spoils & dredging take-offs

UAS Applications (Cont.)

• SWPPP BMP surveys for required EPA/state

documentation

• Emergency response in remote areas (AED)

• Go places previously difficult and/or unsafe to reach

• Pre- and post-blast condition surveys

• Developer and contractor marketing videos

Recognize this project site?

Benefits of using UAS’s

• Photo-document/survey 160-acre site in 40 minutes on

one battery charge (traditional aerial photography can

cost $1K/month)

• Potential 50% reduction vs. traditional aerial surveys

• VTOL UAS hover & go places other aircraft cannot

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UAS Selection Criteria

• Define your mission(s)

• Qualified Operator(s)

• Select UAS type

• Controls & hardware

• Payload such as cameras

• Battery type/life

Just remember, whenever in doubt:

The US Government has the biggest drones on the block.

Regulatory Environment

• FAA FMRA of 2012 required FAA to determine if

UAS can operate safely in NAS

• Public Use Environment – Police, Fire & EMT

• FAA currently bans commercial use of UAS’s

without Section 333 FMRA approval

• FAA NPRM issued February 2015

• There are no formal qualifications or certification

process yet for commercial operators

• FAA may change rules and curtail hobbyist use

• No Fly Zones (e.g. 15 miles of Reagan Airport)

15

Notice of Proposed Rulemaking

for Commercial Use

• UAS must weigh less than 55 lbs.

• VLOS only – operator and/or observer(s)

• May not operate over “persons”

• Daylight only operations

• Max airspeed 100mph - max altitude of 500 ft. AGL

• Minimum visibility required = 3NM ( 3.5 statute miles)

• No operation in Class A airspace

• ATC permission needed for Class B,C,D and E airspace

• No ATC permission required for Class G airspace

• Micro UAS category < 4.4 lbs. for class G airspace

Notice of Proposed Rulemaking

for Commercial Use (Cont.)• UAS operators would be required to:

– Pass an FAA-approved knowledge test

– Be vetted by TSA

– Obtain unmanned aircraft operator certificate

– Pass an aeronautical knowledge test

– Be at least 17 years old

– Make UAS available for FAA inspection and/or testing

– Register UAS and display registration numbers like regular aircraft

Hobbyist vs. Commercial Use

• Hobbyist = hobby = no commercial use permitted

• Commercial = offering a professional service in

connection with a business

• Some contractors are operating drones by claiming their

operators are hobbyists

• Several legal cases have been brought by the FAA

Risks & Concerns

• Limited commercial airspace available in the U.S.

• Potential for 3rd party hacking of drone controls

• “Fly-aways” and loss of UAS power - technology is currently limited for many inexpensive UASs

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Risks & Concerns (Cont.)

• Bird strike & wind

• Cellular tower or other electromagnetic interference

• Lost wireless connection, problems with onboard GPS or compass

• Improper calibration of GPS/compass

• Claims of illegal surveillance, trespass, privacy and harassment

• Homeland security issues

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So you want to use a drone?

Options to use drones for commercial purposes

include:

Embrace the risk – apply for FAA Section 333

approval/Certificate of Authorization (COA) to operate

in-house - this approach will take significant

investment in time and money

Transfer Risk - hire specialty sub (Section 333

approval, bonded, insured, etc.)

FAA 333 Petition for Exemption Contractor Must Describe:

• Intended UAS operations and procedures

• Equivalent level of safety

• Purpose for exemption

• Qualification of any PIC(s)

• Statutory authority for exemptions

• Public benefit

AGC Comments on Proposed FAA UAS Rules

• Greatest interest: aerial photographs/ video of pre-existing site conditions, active job sites, and projects upon substantial completion

• Standard operational limitations too restrictive for construction industry

• Create streamlined process for exemption requests

Insurance Considerations

Will you insure the risk via CGL endorsement, special UAS aviation policy, self-insure or take a chance?

• CGL Policy Endorsement

– CoBI and 3rd party PD.

– Additional coverage may be available for:

• Consequential damages

• Catastrophic loss

• Aviation Policy:

– PD/Legal liability (AKA “Hull” coverage)

• Product liability for manufacturers

• May provide expanded coverage

Consult your broker

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ISO “UAS Endorsement”

• New ISO endorsement treats aircraft and UAS

exposures separately

• Expected implementation June 2015

• Provides CGL Policy Coverage for BI/PD

• Allows insurers to decide how to cover UASs once the

FAA ban is lifted

Example of ISO EndorsementTHIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ENDORSEMENT #

This endorsement, effective 12:01 A.M. forms a part of Policy No. issued to by

UNMANNED AERIAL VEHICLE ENDORSEMENT

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM

SECTION I – COVERAGES, COVERAGE A – BODILY INJURY AND PROPERTY DAMAGE LIABILITY, 2. Exclusions, g. Aircraft, Auto Or Watercraft, is hereby amended by including the following:

(6) “Bodily injury” or “property damage” arising out of the operation of an unmanned aerial vehicle which (i) is remotely controlled by an operator, (ii) is no longer than three (3) feet long and three (3) feet wide, and (iii) does not weigh more than ten (10) pounds (hereinafter referred to as “Unmanned Aerial Vehicle”).

For the purposes of the coverage contemplated in this endorsement only, Unmanned Aerial Vehicles will not be considered aircraft.

All other terms, conditions and exclusions shall remain the same.

AUTHORIZED REPRESENTATIVE

State & Local Regulation

Considerations

• FAA is silent on state & local regulation of UAS.

AGC suggests FAA rule that state & local

governments may not adopt operational rules

outside traditional areas of state concern.

• Contractors should determine what the laws are

in the states where they operate. Some states

have already enacted legislation governing the

commercial use of UAS in their state.

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UAS Pilot Training

• Get FAA 333 Certificate of Approval (COA)

• Require & document UAS pilot training & certification from

manufacturer or distributor

• Operator must understand FAA regulations and airspace

• Operator UAS experience/flying hours important

• Must conduct risk assessments

& develop flight plans

• Use spotter(s)

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Flight Plan

• Purpose of flight

• Flight narrative

• Date & time of flight

• Flight location “our project”

• Maximum altitude

• 48 hour notice for approval

• Emergency Plan

• Flight Plan map reviewed

– No fly zone

– Public areas

– Power lines

– Radio towers

– Hospitals

Flight Safety

Do NOT fly if:

• Inadequate daylight or low light (e.g., fog)

• Rain or lightning

• Wind gusts exceed 15 mph

• Temperatures below 38°F

• Unless flight plan reviewed & approved

• Altitude over 400’ AGL (build in safety factor, e.g., 250’ AGL)

• Distance exceeds ¼ mile away from operator

• Visual line-of-site (LOS) cannot be maintained with UAS

• No spotter (co-pilot) backup available

• No stunt flying allowed!

Pre-Flight Checklist

• Risk Assessment complete

• UAS flight plan reviewed and approved

• Batteries Charged (UAS, controller, FPV, Camera, etc.)

• Compass/GPS properly calibrated

• Propellors Clean and Tight

• Electronics clean/free of debris, wire connections tight

• Takeoff site clear

• Emergency landing area clear

• Wind gusts below 15 mph

• Camera on

Flight Plan Site Map

Add Details:

• Flight

Location

• Property

Lines

• Fencing

• Overhead

Power Lines

• Potential

Hazards

Sample Vicinity Map

Flight Narrative: Within Flight Ops. Base, proceed to 150’ AGL to clear trees and

building. Proceed to the west in visual range and maintain between150’-200’

AGL. Circle target counter-clockwise avoiding the adjacent construction.

FAA Sectional Map

Summary

• Great new technology with many applications

• FAA currently bans commercial use – review AGC

comments to FAA

• Significant cost savings possible over traditional aircraft

• Balance the benefits & risks of using UAS vs.

subcontracting

• Insurance considerations & options

• Pilot/operator qualification & training

• Flight plans & safety

Q & A

PRESENTER:

Ernest C. Brown, Esq., PE

Smith Currie & Hancock, LLP

www.SmithCurrie.com

(415) 249-0850

PRESENTER:

John Babel, AVP

XL Catlin N.A. Construction

john.babel@xlcatlin.com

(303) 513-2773