Odd, white, windowless airplanes. Small, spider-like camera carriers. The drones, of course, are here now, much debated as weapons of war and under development as a package delivery method by at least one of the world’s largest online retailers.
Their most immediate commercial application, however, is simpler: as relatively inexpensive eyes in the sky. What helicopters can do in monitoring traffic, scanning crop fields, scouting fires and inspecting hard-to-reach equipment and infrastructure, a drone, or an unmanned aerial vehicle (UAV) can do for less.
They’re Here Now
And it’s already happening: in police work, border patrol, sports broadcasting, filmmaking, mining, oil and gas production and more. So what’s holding back the industry’s takeoff? In the U.S., the federal regulators at the Federal Aviation Administration (FAA) are struggling to develop rules under which they would approve commercial use.
Drones are, however, in commercial use in other places in the world – in Australia, for example, where distances are vast and skies relatively clear. In the U.S., the skies over populous areas are often the busiest in the world. The FAA, whose deliberate regulatory process has been a major factor in steadily improving the safety of air travel both domestically and around the world, has many issues to examine in assessing drones, from the safety of power lines to the privacy of individuals who may find themselves in the viewfinder of craft hovering overhead.
These risks, of course, won’t go away once the FAA has done its work and the inevitable takeoff happens. Risk managers for organizations that could potentially gain considerable competitive advantage from eyes in the sky should consider the risk issues now so they are ready to advise their organizations as UAV options broaden.
UAV Risk Issues
- Standard aviation risks. The risks for drones are primarily standard aviation risks. Owners of the aircraft will want to insure the aircraft itself in case of accidents and also cover any ensuing liability. In this interim phase, where approved drone use is legal on a non-commercial basis – when companies must own the aircraft themselves and seek approval for a specific use – aviation cover will be an immediate consideration.
- Third-party liability. When the commercial breakout happens, which seems inevitable given the multiple uses for airborne cameras, companies hiring the services of drone providers will need to look at their contracts to assess the liabilities they may face. In most cases, this will be a third-party liability situation, meaning the provider would be on the hook, but contracts must be reviewed carefully.
- Privacy. Commercial drones will likely be hired for narrow purposes: inspecting wind turbines for cracks or roadways for storm damage, for example. But the digital eyes will see anything in their view and send back that information to the party collecting the visual data. This raises privacy concerns issues. Surveillance of employees or non-employees, whether intentional or not, could have serious liability repercussions that will need to be addressed.
Wanted: Trained Operator/Photographers
Wanted: Trained Operator/Photographers
UAVs are unmanned but usually not unpiloted. A remote operator is in control of where they go and where and how they point their camera. The ideal skill set for drone operator is an unusual combination of air navigation and camera skills. These two skillsets don’t usually come together, and drone providers typically must hire someone trained in one and then teach them the other. The party responsible for the safe and successful operation of a drone is ultimately responsible for the proper training of the operators, which may prove more complicated than most training regimens.
The use of drones for freight delivery is farther into the future than the use of drones for inspections and surveillance, but it is on its way. This will add complexities to the risk profile of drone operators as the aircraft may be called upon to travel to unanticipated locations and make safe deliveries in unforeseen circumstances. The dog that barks at a mail carrier may not disturb a descending drone, but a flock of birds could present several problems.
Commercial use of drones is expected to influence the design and nature of the aircraft themselves. The small camera carrying vehicles are likely to grow in size to handle the weight of small packages. Meanwhile, the fuller sized, fixed-wing UAVs may evolve in the opposite direction, shrinking to handle middle-sized loads and allow landing and takeoff at a greater variety of locations. Each new aircraft will certainly be greeted by close scrutiny from underwriters and have policy language crafted for its own risks.
While the casual observer may be worried about the safety of any unmanned vehicle, industry experts are excited about the prospect for improved safety. The majority of aviation accidents are caused by pilot error. The automation built in to the drone technology may help remove some of the chance for human error.
Regulation is a key element to the successful widespread development of the drone industry in the U.S. given the complexities of the liability environment, the crowded skies over metropolitan areas, and the variety of UAVs and their uses. Government plans to develop regulations that would allow for the launch of commercial drone businesses in the U.S. in 2015 may or may not meet their targets – to the frustration of those business owners.
Aviation risk experts, meanwhile, remain in the middle. They are hearing from UAV operators chomping at the bit to put their services on the open market, but they are also working with the regulators to help them lay a foundation for safety that will sustain rapid growth.
The risk management work done now in connection with commercial drone service can be expected to pay dividends as related technologies come into focus. Driverless cars and pilotless cargo ship are in the news and offer similar benefits and pose their own – but for the moment let’s take it one futuristic reality at a time.