By: Jonathan M. Mraunac of member company Ogletree Deakins
        
The Federal Aviation Administration (FAA) recently introduced relaxed regulations concerning the use of drones for commercial purposes. The new regulations could have a significant impact on drone usage in the construction industry.

At this point, most people have at least a general understanding of drones, which are relatively small, remote-controlled, battery-powered flying aircraft. Less understood is the significant utility drones can provide for the construction industry. Current technology enables contractors to use drones to perform site surveys and basic soil analyses, create three-dimensional (3-D) site models, track work-in-place and productivity, conduct inspections, and deliver tools and materials. With the help of drones, site surveys can be performed in two days rather than multiple weeks; inspections can become unmanned and monitored from the ground, improving safety; and drone-aided site modeling facilitates accurate cost and progress tracking and adherence to design intent. Drone use on construction projects creates efficiency, reduces exposure, and, ultimately, decreases costs.


The official name for a drone is "unmanned aircraft system(s)" (UAS). The term "UAS" includes the drone aircraft itself and all of its controlling equipment. All UAS are regulated by the FAA, which has carved out regulations specifically addressing small UAS—i.e., drones weighing less than 55 pounds—for commercial use. Small UAS (sUAS) are subject to a multitude of special rules, but the FAA’s newly revised regulations make their registration and operation much easier than ever before. This undoubtedly will lead to expanded use of sUAS technology in the construction industry.


Previously, under section 333 of the FAA Modernization and Reform Act of 2012, one could not operate an sUAS unless he or she was an FAA-certified aircraft pilot, and operation was not permitted within 500 feet of nonparticipating individuals. Both of these rules severely limited drone application, especially in densely populated areas.

On June 21, 2016, the FAA announced its revised sUAS rules. Beginning August 29, 2016, in order to legally operate an sUAS, an operator must comply with part 107 of Title 14 of the Code of Federal Regulations, which is a relaxed set of requirements compared to those found in section 333 of the FAA Modernization and Reform Act of 2012. The operator (now officially referred to as a "remote pilot in command") no longer needs to possess pilot certification; rather, the operator must obtain an sUAS remote pilot certificate and pass a knowledge test every two years.

To qualify for an sUAS remote pilot certificate, one must have demonstrated aeronautical competence by passing an initial test at an FAA-approved testing center. The initial test assesses knowledge in the areas of UAS regulations, airspace classification, weather, emergency procedures, radio communication, aircraft performance, aeronautical decision-making, and airport operations. Further, a noncertified person may operate an sUAS if he or she is directly supervised by the remote pilot in command. The notable operating limitations of part 107 are: (1) no altitude limits within uncontrolled (Class G) airspace, provided that the sUAS is within 400 feet of a structure; (2) a maximum groundspeed of 100 miles per hour; (3) a requirement that an operator remain in visual line-of-sight with the sUAS at all times; (4) a prohibition on sUAS operating over nonparticipating individuals (this restriction can be waived by the FAA on a case-by-case basis); (5) daylight hours restrictions (i.e, operations may occur only from "30 minutes before official sunrise to 30 minutes after official sunset, local time"); and (6) a requirement that  an operator register the sUAS unit online at the FAA’s website. A violation of these regulations may result in civil penalties (i.e., fines) or a revocation of a remote pilot certification. These revised sUAS rules make in-house drone operation much more feasible than before.


Should a contractor elect to subcontract drone operation, there are several companies in the market.  One such company is LIFT Technologies based in Chicago, Illinois.  In addition to construction-industry drone services, which include inspections, site surveys, soil analysis, 3 D modeling, and progress tracking, drones companies serve the telecom, real estate, insurance, broadcasting, and energy industries.


Whether a contractor wishes to self-perform drone operation or subcontract the drone work, there are exposure issues to consider, such as the risks of personal injury, property damage, and invasions of privacy. With respect to personal injury and property damage, part 107 does not mandate liability insurance; however, a contractor should ensure that both it and its subcontractor (if applicable) possess adequate liability coverage and inquire with its insurance carrier as to whether sUAS operations would be covered under a current commercial general liability (CGL) policy or whether a specific endorsement (or a new policy) would be required.

Some insurance carriers offer CGL coverage specifically tailored for drone operation. Because part 107 expressly does not preempt state law, states may treat sUAS operation as an activity analogous to motor vehicle operation, impose minimum insurance requirements, and make sUAS operators subject to liability for personal injury and property damage. Part 107 prohibits operation over nonparticipating individuals; while presumably a jobsite will be fenced off and drone flight confined to the jobsite, best practices suggest overhead canopies to protect the public.

Regarding privacy rights, part 107 does not include privacy provisions, leaving those issues to individual states’ laws. Some states have enacted laws preventing unauthorized photography or recording by drones. (The National Telecommunications and Information Administration (NTIA) has even developed a set of sUAS privacy best practices.) To address possible privacy-related issues, a contractor should consider obtaining consent to be recorded from all project participants. Pragmatically, consent from construction personnel performing work on site will not be problematic. However, on a residential project (e.g., an sUAS façade inspection of a condominium building), a contractor might do well to obtain from the owner (i.e., condominium association) consent for recording and a representation that the owner has provided notice to residents of the scope and timing of the drone operation.


The expanded use of drone technology in the construction industry and in commerce will have a tremendous impact. As the new sUAS regulations have yet to become effective, it remains to be seen how issues such as insurance, privacy, safety, and law enforcement will materialize in practice. Anticipate an update to this article in the near future.

This article was drafted by the attorneys of the law firm Ogletree Deakins and is reprinted with permission. This information should not be relied upon as legal advice.