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December 11, 2020 Construction Law 101

A Construction Lawyer’s Guide to Navigating Drone Law Amid the Rise of Drone Use During the COVID 19 Pandemic

Cristina Sacco

Drones have become a vital tool in business, particularly in the construction industry because of their ability to make certain construction activities safer, more efficient and cost effective. Just as with any new technological advancement, the law defining the scope of potential liabilities surrounding the use of drones is still developing. While construction lawyers need to know the key federal and state regulations governing drones, they should also be aware of the full scope of potential liabilities that could result from drone use on a jobsite. 

Construction companies have been using drones to survey and map sites, assess material stockpiles, monitor jobsite progress, and inspect work that is difficult or even dangerous for human inspectors to reach.  Perhaps one of the most powerful benefits drones offer is enhanced communication between contractors on a job. This real-time, up-to-date sharing of videos or photographs of progress on a jobsite is critical because it informs contractors of issues not easily noticed at ground level and helps remedy those issues faster.

During the COVID-19 pandemic, drones have proven invaluable because drone software systems enable construction companies to continue to build by performing certain tasks remotely. Since the spread of COVID-19, drone flights by construction companies are up 70 percent, and are touted as "the perfect kind of socially distant worker\u2026they collect data and share it with people who aren't present."

While drones offer significant advantages to the construction industry, especially in the time of COVID, the use of drones on construction sites exposes companies to various regulatory mandates and potential liabilities. 

Federal and State Regulations Controlling Drone Use:

First, companies considering the use of drones need to ensure they comply with all relevant federal and state regulations governing drone use.  Part 107 of the Federal Aviation Administration ("FAA") regulations, 14 C.F.R. Part 107, sets forth the federal rules.  For example, commercial drones must: (1) not weigh more than 55 lbs.; (2) be operated within the United States; (3) fly only in uncontrolled airspace; (4) fly under 400 feet; (5) fly during the day; (6) fly below 100 mph; (7) not fly over people; (8) not be operated from a moving vehicle; and (9) remain in the line of sight of the operator during operation. 

To utilize a drone in a manner that deviates from these rules, a company will need to obtain a waiver from the FAA. Waiver applications must be thorough and include detailed descriptions of drone capabilities, pilot training, account for geographic terrain and weather, and document procedures to mitigate risk. After approval, these waivers and their expiration dates are published on the FAA website. Companies neglect Part 107's requirements and the waiver process at their own peril: failure to comply can result in heavy civil and criminal penalties.

According to the National Conference of State Legislatures (NCSL), since 2013, 44 states enacted bills addressing drone activity, 18 of which were enacted just last year. There is an uptick in state regulation of drone activity because the federal regulation falls short. For instance, under federal law it is prohibited to fly a drone over security sensitive airspace such as military bases, and critical infrastructure like nuclear power plants. However, beyond nuclear power plants, federal law fails to define what qualifies as "critical infrastructure." Recognizing this void, many states have adopted laws to define "critical infrastructure," resulting in differences in regulation and penalties from state to state. For instance, in Tennessee it is a felony offense to operate a drone over "critical infrastructure," which the law defines to include electrical systems, petroleum refineries, certain types of manufacturing facilities, chemical storage, and water treatment facilities. However, in Texas, it is a Class B misdemeanor to fly a drone over "critical infrastructure," which is defined more broadly than in Tennessee to include a wider variety of facilities. Accordingly, it is imperative for construction lawyers to know the law in the states in which their clients operate, as operating a drone near or on a particular construction site may be illegal and could yield civil or even criminal penalties. 

Scope of Liability Attached to Drone Use:<\/u>

Second, construction companies considering the use of drones need to understand the scope of potential civil liability they could face.  For example, in 2017, Millennium Tower, the tallest residential building in San Francisco, employed a drone to conduct an aerial survey of the building. During the inspection the drone lost satellite signal, crashed, and narrowly avoided hitting pedestrians below. Had the drone injured a pedestrian, an employee, or damaged adjacent property, Millennium Towers could have faced liability for claims of personal injury, worker's compensation, and negligence. This crash is one example of how the simple use of a drone could attach a host of potential legal liabilities.

Such accidents could also expose companies to penalties for Occupational Safety and Health Administration ("OSHA") violations. Currently, there are no drone-specific OSHA standards in place, but that does not negate the general obligation OSHA imposes on employers to make the workplace safe for employees. Drones can present hazards if they are flown too close to a worker or collide with adjacent infrastructure. Because of these risks, construction lawyers should be aware of OSHA penalties and advise clients accordingly.

Even if a drone accident does not occur, drone use on jobsites can still expose construction companies to claims of trespass, nuisance, and violations of privacy laws. For example, in 2014, a man in New York was arrested for attempted unlawful surveillance after flying a drone too close to a hospital and allegedly capturing footage of patients in examination rooms. He was acquitted of the charges, but this case exemplifies how drone use can lead to liabilities other than those that stem from physical harm. As a result, construction companies employing drones should be aware of their drone's flight path to ensure these types of violations do not occur.

An incidental area of liability for construction companies occurs when state and federal regulators use drones as a tool to regulate the construction industry. For example, in 2018 OSHA adopted the use of drones to conduct workplace safety inspections. Should an OSHA drone capture an environmental issue on a construction site, OSHA can share its video with other agencies for follow-up or enforcement. However, OSHA needs consent to conduct these drone inspections. Accordingly, it is important for companies to understand all their rights before consenting.

Importance of Drone Insurance:

Because of this still developing web of federal and state drone regulations, as well as the potential civil and criminal liabilities resulting from drone use, it is important for companies to review their insurance policies and obtain sufficient coverage.  Often, commercial general liability insurance coverage contains an "aircraft" exclusion and in 2015, the FAA officially asserted that drones are considered aircraft. Federal courts also have held that drones are aircraft.  For example, in Philadelphia Indemnity Insurance Co. v. Hollycal Production, Inc., the United States District Court for the Central District of California held that an insurer did not need to indemnify an insured party for injuries a drone caused to the eye of a wedding guest because drones are aircraft and within the aircraft exclusion of the insurance policy. To prevent lack of coverage issues, it is good practice to purchase insurance policies specific to drones.  When purchasing drone insurance, it is important to ensure the policy includes coverage for a company's specific use of drones, and for claims of negligence, trespass, privacy violations, and claims of property damage or personal injury arising from drone use.

While the use of drones on a construction site poses a myriad of risks, these risks can be managed through careful compliance with federal and state regulation governing drone use and adequate insurance coverage. Drones have become vital tools in the construction industry and construction lawyers should be prepared to navigate this new and evolving regulatory and legal landscape.

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    Cristina Sacco

    Hollingsworth LLP, Washington, DC