Drones: The Risks & Rewards

Transcription

1 Embracing the Future Now ACWA JPIA 2017 Spring Conference Drones: The Risks & Rewards Presented by: Karen Thesing, JPIA Director of Insurance Services Mark Hazelwood & Kimberly Chin, Attorneys at Law, Allen, Glaessner, Hazelwood & Werth Tracy Ingebrigtsen, Safety & Compliance Coordinator, Moulton Niguel Water District May 9, 2017 Hyatt Regency Hotel Monterey, California

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3 1 Drones: Risks &Rewards ACWA JPIA Workshop May 9, 2017 Monterey, CA Karen L. Thesing, ARM Director of Insurance Services Agenda Updated information, rules, regulations and laws surrounding usage of drones Best Practices for implementing a drone usage policy in your agency An overview from a JPIA Member on drone utilization What to do when you procure a drone? Insurance requirements for contracting out drone services

4 2 ASSOCIATION OF CALIFORNIA WATER AGENCIES JOINT POWERS INSURANCE AUTHORITY (ACWA/JPIA) CONFERENCE MAY 9, 2017 It s a Bird, It s a Plane, It s a DRONE: Evaluating the Emerging Risk of Drones Presented By: Mark F. Hazelwood, Esq. Kimberly Y. Chin, Esq. Emerging Uses fordrones Scientific research and surveying Weather Tracking animals Data collection Insurance surveying Post disaster area assessment Agricultural uses Wildfire firefighting Crop dusting Data collection Law enforcement Surveillance Search and rescue Crime scene mapping Crowd control Entertainment production Aerial views/photographs Commercial delivery (Amazon proposal) Allen Glaessner Hazelwood & Werth 2

5 3 Emerging Usesfor Water Agencies Inspection of flood control waterways, reservoirs, and other infrastructure Reduced operational costs, fuel emissions Increased employee safety Allen Glaessner Hazelwood & Werth 3 FAA Definition of a Drone Also known as an Unmanned Aerial System ( UAS ) Consists of the unmanned aircraft ( UA ) and all of the associated support equipment, control station, data links, telemetry, communications and navigation equipment, etc., necessary to operate the unmanned aircraft. The UA is the flying portion of the system, flown by a pilot via a ground control system, or autonomously through use of an on board computer, communication links and any additional equipment that is necessary for the UA to operate safely. May or may not have acamera May or may not be programmable as to route Allen Glaessner Hazelwood & Werth 4

6 4 FAA Recognized Uses fordrones Public Operations (Governmental) Certain government operations within U.S. airspace Cannot have a commercial purpose; common purposes include law enforcement, firefighting, border patrol, disaster relief, search and rescue, military training, and other government operational missions If under 55 pounds, compliance with Small Unmanned Aircraft Rule (Part107) If over 55 pounds, requires a certificate of authorization ( COA ) from the FAA, managed through an online portal Permits nationwide flights in Class G airspace at or below 400 feet, self certification of the UAS pilot, and the option to obtain emergency COAs (e COAs) under special circumstances May include special safety provisions specific to the proposed operation Issued for a specific period up to two years Allen Glaessner Hazelwood & Werth 5 FAA Recognized Uses fordrones (cont d) Civil Operations (Non Governmental) Any operation that does not meet the statutory criteria for a public aircraft operation If under 55 pounds, compliance with Small Unmanned Aircraft Rule (Part107) If over 55 pounds, regulated through Section 333 exemption or Special Airworthiness Certification ( SAC ) Allen Glaessner Hazelwood & Werth 6

7 5 FAA Recognized Uses fordrones (cont d) Model Aircraft Operations (Hobby or Recreational) Hobby or recreational purposes Student use of drones for educational purposes Should follow safety guidelines: Fly below 400 feet and remain clear of surrounding obstacles Keep the aircraft within visual line of sight at all times Remain well clear of and do not interfere with mannedaircraft operations Do not fly within 5 miles of an airport unless you contact the airport and control tower beforeflying Do not fly near people or stadiums Do not fly an aircraft that weighs more than 55 pounds Don't be careless or reckless with the unmanned aircraft operator could be fined for endangering people or other aircraft Formal regulations in 2017? ANY DRONE USED BY A PUBLIC ENTITY WILL BE REGULATED BY THE FAA* *except for educational purposes Allen Glaessner Hazelwood & Werth 7 Emerging Risks Associatedwith Drones RISKS RELATED TO A PUBLIC ENTITY S USE OF DRONES Accidents resulting in personal injury or property damage Pilot error/inadequate training Drone malfunction/maintenance Failure to supervise/protect against dangers Worker s compensation Trespass either into airspace or onto property itself Privacy and civil rights violations Violation of Fourth Amendment (search and seizure) Failure to follow warrant procedure Cyber risks Breach of drone technology Inadequate maintenance and storage of collected data and information Regulatory violations Allen Glaessner Hazelwood & Werth 8

8 6 Historical Overview of Drone Regulation FAA Modernization and Reform Act of 2012: Expanded drone access to national airspace should integrate UAS into national airspace by September 2015 Regulations re governmental and civil operations already exist (COA, Section 333, Special Airworthiness Certificates processes) November 2014: National Transportation Safety Board (NTSB) finds that UAS are aircrafts and subject to FAA regulations February 2015: FAA released proposed regulations regarding small UAS applies to commercial uses, but does not apply to model airplanes October 2015: FAA announces UAS Registration Task Force December 14, 2015: FAA Announces Mandatory Drone Registration December 17, 2015: FAA Issues Fact Sheet on State and Local UAS Laws December 21, 2015: Online drone registration opens May 18, 2016: FAA posts database showing the city, state, and zip code of each registered drone owner June 20, 2016: FAA establishes UAS Advisory Committee June 21, 2016: FAA issues Small Unmanned Aircraft Rule (Part 107) August 29, 2016: Small Unmanned Aircraft Rule (Part 107) goes into effect Allen Glaessner Hazelwood & Werth 9 Federal Registration ofdrones Effective December 21, 2015, anyone who owns a UAS of a certain weight must register with the FAA Deadline to register: February 19, 2016 Owners must be 13 years of age or older and a U.S. citizen or legal permanent resident Register online at if UAS weighs more than.55 pounds and less than 55 pounds Register by paper with Aircraft Registry Process if UAS is Used for commercial purpose Used for other than hobby or recreational purpose Greater than 55 pounds Operated outside of theu.s. Failure to register may result in civil and criminal penalties Allen Glaessner Hazelwood & Werth 10

9 7 FAARules for Small UAS (Part 107) Announced June 21, 2016; Went into effect August 29, 2016 Applies to both public operations and civil operations Applies to drones under 55 pounds Does not apply to model aircraft operations (hobby or recreational use) Allen Glaessner Hazelwood & Werth 11 FAARules for Small UAS (Part 107) Cont d Restrictions: Under 55 pounds Day light only operations or civil twilight with appropriate anticollision lighting Minimum weather visibility of 3 miles from control station Maximum speed is 100 mph Maximum altitude is 400 feet above the ground; higher if drones remains within 400 feet of a structure Operator must keep drone within visual line of sight. If first person view or similar technology, user must have a visual observer who keeps the drone within unaided line of sight Operator must be at least 16 years old Remote pilot certificate required Cannot fly over anyone who is not directly participating in the operation, not under a covered structure, or not inside a covered stationary vehicle Allen Glaessner Hazelwood & Werth 12

10 8 FAARules for Small UAS (Part 107) Cont d Waiver Process Request online at Recommended to submit request at least 90 days before proposed operation May be approved for a period of up to four years Commonly waived regulations: Daylight operation Operation of multiple smalluas Operation overhumans Waivers granted: Remaining Question: Enforcement Allen Glaessner Hazelwood & Werth 13 California Regulations Existing laws relating to trespass and privacy 2015 Governor Brown signed AB 856: Expanded liability for physical invasion of property (Cal. Civ. Code ) to include a person knowingly entering into the airspace above the land of another person without permission Governor Brown vetoed SB 271: Would have prohibited flying drones over schools during school hours SB: 168: Would have allowed firefighters to disable drones flying over emergencies SB 170: Would have made flying a drone over a prison a misdemeanor SB 142: Would have made flying a drone over private property at less than 350 feet without owner s permission an offense Allen Glaessner Hazelwood & Werth 14

11 9 California Regulations 2016 Governor Brown signed AB 1680: Amends Penal Code section 402 to include UAS operators; Section 402 makes it a misdemeanor to interfere with the duties of law enforcement and other first responders at an emergency scene SB 807: Provides immunity to public entities/public employees for damage to an UAS if damage was caused while the public entity/public employee was performing specific emergency services and the UAS was interfering with the provision of those emergency services Governor Brown vetoed AB 1662: Would have required an UAS operator involved in an accident resulting in injury to an individual or damage to property to immediately land the UAS and provide certain information to the injured individual or the owner or person; failure to comply could result in an infraction or misdemeanor AB 2148: Would have made it unlawful to use a UAS over lands or waters managed by the Department of Fish and Wildlife and Department of Parks and Recreation; makes unlawful the use of UAS to take or assist in the take of fish or wildlife for sport purposes (including scouting) AB 2320: Would have prohibited a person subject to a stay away order (i.e. a restraining order) from flying an UAS within the prohibited distance of the other person or from capturing images of the other using an UAS; violation would be a misdemeanor (like existing violations of a protective order AB 2724: Would have required manufacturers to include link to FAA website re safety regulations/best practices, geo fencing, and owners to procure liability insurance Allen Glaessner Hazelwood & Werth 15 California Regulations 2017 AB 527: Amend Food & Ag. Code to include UAS Unlawful for any person to operate an unmanned aircraft in pest control unless the pilot holds a valid pest control aircraft pilot s certificate and is certified or otherwise authorized by the FAA to operated an unmanned aircraft approved by the FAA to conduct pest control Allen Glaessner Hazelwood & Werth 16

12 10 Local Regulations STAY AWARE OF LOCAL REGULATIONS City of Los Angeles Effective December 2, 2015 The ordinances prohibits the operation of a drone Within 5 miles of the airport Beyond the visual line of sight of the operator At any time other than during daylight Above 400 feet above the earth s surface Violation results in a misdemeanor Attempt to mirror FAA regulations and enforce them on a municipal level See adopted ordinance for specific language Other local efforts to regulate drone use Poway, California Paradise Valley, Arizona Menlo Park. CA San Mateo County, CA Allen Glaessner Hazelwood & Werth 17 Risk ManagementAdvice FOR PUBLIC ENTITY USE OF DRONES For public entity owned and operated drones Develop a plan for use, including Maintenance and inspection of drones (including documentation of battery cycles, propeller changes, etc.), Record/document operations (logging flight plans), Obtaining permission to go on property or providing advance notice to prevent trespass or privacy violations, Storage and/or maintenance of any collected information, Guidelines for recovering fallen drones Secure a trained operator with credentials that meet FAA requirements Ensure procedures for tracking and renewing credentials Obtain a COA if drone over 55 pounds Ensure insurance coverage for any drone accident or incident that may result in liability If drone will be operated on behalf of multiple agencies, ensure contracts are clear as to liability Allen Glaessner Hazelwood & Werth 18

13 11 Risk ManagementAdvice FOR PUBLIC ENTITY USE OF DRONES CONT D For a public entity that contracts for use of a drone owned and operated by a third party Ensure the third party has a certified operator (if drone less than 55 pounds) Ensure the third party has a qualified operator and a Section 333 exemption that encompasses the intended operation (if drone is over 55 pounds) Confirm that the public entity s operation fits within the third party s Section 333 exemption (if drone is over 55 pounds) Ensure insurance coverage/indemnity for any drone accident or incident that may result in liability Be wary of accepting volunteer services Allen Glaessner Hazelwood & Werth 19 Risk ManagementAdvice SOLUTIONS Education Promote Know Before You Can Fly B4UFLY app: FAA smartphone app that helps unmanned aircraft operators determine whether there are any restrictions or requirements in effect at the location where they want to fly Available in the Apple App Store or Google Play Store Technology example:geo fencing Support legislation Allen Glaessner Hazelwood & Werth 20

14 12 Risk ManagementAdvice COVERAGE/UNDERWRITING CONCERNS Determine current drone use or any plans to adopt drones as part of operations, including type of equipment used, operators, intended uses, systems for storing and controlling collected data, and proof of certification or COA from the FAA Assess types of coverage that may be needed: General liability (for bodily injury, personal injury, and property damage claims) check for aircraft exclusion language Hull coverage/physical damage to drone Privacy and civil rights coverage including law enforcement liability and public officials liability Worker s compensation Cyber coverage If no coverage through JPA, consider outside commercial drone insurance $1M Coverage for $ per year On demand insurance: $1M in liability for $10/hour Allen Glaessner Hazelwood & Werth 21 QUESTIONS? MARK F. HAZELWOOD, ESQ. mhazelwood@aghwlaw.com KIMBERLY Y. CHIN, ESQ. kchin@aghwlaw.com 180 Montgomery Street, Suite 1200 San Francisco, CA (415) Allen Glaessner Hazelwood & Werth 22

15 13 An overview from a ACWA JPIA Member on drone utilization DRONE MANAGEMENT Tracy Ingebrigtsen Safety and Compliance Coordinator May 2017

16 14 Moulton Niguel Water District Facts 170,000 Customers Laguna Niguel, Aliso Viejo, Laguna Hills, Mission Viejo, and Dana Point 40 Reservoirs (Potable/Recycled) 1385 Miles of Pipe (Potable/Recycled/Sewer) Water District Opportunities for Drone Use Day to Day Engineer out some safety risks associated with climbing on top of reservoirs. Emergency Able to view assets (within 400ft) if access is limited unstable or unsafe. Birdseye View Ability to review construction projects/facilities/accidents from above without an impact to ongoing work.

17 15 Drone Yes! What Next? Purchase a Drone ($1000+) Register Drone with the FAA (identification labels required) Need Licensed Pilots Insurance Do I need to register my Unmanned Aircraft? You need to register your aircraft if it weighs between 0.55 lbs. (250 grams) and up to 55 lbs. (25 kg)

18 16 Drone Yes! What Next? Purchase a Drone ($1000+) Register Drone with the FAA Need Licensed Pilots 5 Day Class ($1500 per person) Pass Exam Recurrent Training (Every 24Months) Insurance Drone Policy? No MNWD specific policy yet (pilots still need to take exam). Current MNWD policies require employees to follow all pertinent State and Federal Rules. This would include the 14 CFR Part 107 requirements.

19 17 Highlights of FAA Rules to Incorporate into Policy Flight Log (Create Similar to Confined Space/Hot Work Permits) Accident Reporting (injury, >$500 damage) Daylight Operation Visual Line ofsight No Operation Over People Privacy Considerations General Safety (Electrical Wires, Wildlife, etc.) Moulton Niguel Water District Name: Tracy Ingebrigtsen Phone: La Paz Road Laguna Niguel, CA FOLLOW US ONLINE!

20 18 ACWA JPIA Property and General Liability Coverage Procuring ACWA JPIA Coverage Information needed to procure property and general liability coverage including: 1. UAV/Drone Data: model/year built 2. Manufacturer 3. Value 4. UAV launch method, e.g., airport runway, catapult, roads, field, vertical takeoff, etc. 5. How is aircraft controlled, e.g., no pilot, ground-based pilot, etc. 6. Proposed use of aircraft 7. Area of proposed operations

21 19 Risk Management Considerations Establishing a drone utilization policy Operator(s) experience Intended use Interaction between operator & observer Weather & environmental issues Video capabilities Ensuring drone airworthiness - pre & post flight checks Drone maintenance Sample Documents Drone Usage Policy Insurance Requirements for contracts

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37 35 ACWA JPIA DRONE USE POLICY (SAMPLE) Purpose of Policy This policy is intended to establish the rules for the use of unmanned aerial systems (UAS) including retrieval and dissemination of images and data captured by the UAS. This policy applies to the use of UAS by (AGENCY NAME) departments and (AGENCY NAME) contractors. Definition An UAS is an unmanned aircraft of any type that is capable of sustaining flight, whether remotely controlled or preprogrammed and all the supporting or attached hardware designed for gathering information through photography, video recording or any other means. It is an aerial system or device that is not designed, manufactured, or modified after manufactured to be controlled directly by a person from within or on the aircraft, aerial system or device. UAS are also commonly referred to as unmanned aerial vehicles or drones. Policy It is the policy of the (AGENCY NAME) to utilize UAS to enhance the department s ability to. Any application of the UAS will be in accordance with Federal, State and City laws, to include constitutional privacy rights, search and seizure regulations and Federal Aviation Administration (FAA) regulations. Privacy Considerations Personnel operating UAS shall only collect information using UAS, or use UAS collected information, to the extent that such collection or use is consistent with and relevant to an authorized purpose. Under no circumstances may recordings from UAS be used for personal purposes. The (AGENCY NAME) is prohibited from using the UAS data to collect information on individuals or private property, except for purposes as strictly defined above as a public safety or public interest purposes. For all authorized UAS use, (AGENCY NAME) departments will retain all UAS collected data for a period not to exceed one year, as defined by 28 Code of Federal Regulation (CFR) Part 23. Exemptions to the data retention limit may be granted by the (AGENCY GENERAL MANAGER) in special circumstances. April 2017

38 36 Authorized Uses XXXXXXX XXXXXXXX XXXXXXXXXX XXXXXXXXXXXXX Prohibited Uses The UAS shall not be used for the following: To conduct random surveillance activities. To target a person based solely on individual characteristics, such as, but not limited to race, ethnicity, national origin, religion, disability, gender or sexual orientation. To harass, intimidate or discriminate against any individual or group. To conduct personal business of any type. Prohibited Zones The UAS may not be used within five miles of an airport unless approved by the FAA. Authorized Operators and Public Safety Only personnel who have successfully completed the required training shall be permitted to operate an UAS. An UAS operator must maintain a visual line-of-sight with an UAS in-flight at all times. UAS may only reach a maximum altitude of 400 feet above ground level. An UAS operator may only operate one UAS at a time. Any UAS used by the (AGENCY NAME) may not have any distracting lighting, flagrant coloring, or lasers that may otherwise distract drivers. Flight Logs Each authorized UAS operator will maintain a flight log. Operators will log the date, flight time and locations of all UAS deployments. They will also note, case number, incident type, automated flight or manual flight, and whether photo images or video were captured during the flight. April 2017

39 37 Program Coordinator The (AGENCY GENERAL MANAGER) will designate (NAME) to oversee the UAS Program. Their duties will include the following: Ensuring that policies and procedures conform to current laws, regulations and best practices. Establishing a training standard for operators that meets FAA requirements. Overseeing the selection and training of operators. Maintaining and updating the Certificate of Authorization (COA) with the FAA. Overseeing procurement and maintenance of UAS equipment. Review of UAS deployments to ensure compliance with policies and operating procedures. Conducting audits of flight logs semiannually. Retention of Data Photographs and video collected by UAS shall be retained in accordance with (AGENCY NAME) Records Retention Schedules. Enforcement All UAS must adhere to all FAA Temporary Flight Restrictions. April 2017

40 38 Sample Insurance Requirements for the Use of UAVs or Drones Insurance Owner/Operator shall procure and maintain for the duration of the contract insurance against claims for injuries to persons or damage to property which may arise from or in connection with the ownership, maintenance or use of the Unmanned Aerial Vehicle. MINIMUM SCOPE AND LIMIT OF INSURANCE Coverage shall be at least as broad as: Aviation Liability Insurance-on an occurrence basis, including products and completed operations, property damage, bodily injury with limits no less than $1,000,000 per occurrence, and $2,000,000 in the aggregate. This coverage may also be provided by endorsement to a Commercial General Liability policy. In that event then: 1. Commercial General Liability (CGL): Insurance Services Office Form CG covering CGL on an occurrence basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $2,000,000 per occurrence. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this project/location (ISO CG or 25 04) or the general aggregate limit shall be twice the required occurrence limit. 2. Workers Compensation insurance as required by the State of California, with Statutory Limits, and Employer s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. If the Owner/Operator maintains broader coverage and/or higher limits than the minimums shown above, the Entity requires and shall be entitled to the broader coverage and/or higher limits maintained by the Owner/Operator. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the Entity. Self Insured Retentions Self-insured retentions must be declared to and approved by the Entity. Other Insurance Provisions A. The Aviation Liability or General Liability policy is to contain, or be endorsed to contain, the following provisions: 1. The Entity, its officers, officials, employees, and volunteers are to be covered as additional insureds with respect to liability arising out of work or operations 2. For any claims related to this project, the Owner s/operator s insurance coverage shall be primary insurance coverage at least as broad as ISO CG as respects the Entity, its officers, officials, employees, agents, and volunteers. Any insurance or selfinsurance maintained by the Entity, its officers, officials, employees, agents, or volunteers shall be excess of the Owner s/operator s insurance and shall not contribute with it.

41 39 3. Each insurance policy required above shall provide that coverage shall not be canceled, except with notice to the Entity. Acceptability of Insurers Insurance is to be placed with insurers with a current A.M. Best rating of no less than A:VII if admitted in the State of California. If coverages are not available from an admitted insurer, the coverage may be written by a non-admitted insurance company. A non-admitted company should have an A.M. Best rating of A:X or higher. Verification of Coverage Owner/Operator shall furnish the Entity with original certificates and amendatory endorsements, or copies of the applicable insurance language, effecting coverage required by this contract. All certificates and endorsements are to be received and approved by the Entity before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Owner s/operator s obligation to provide them. The Entity reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. Waiver of Subrogation Owner/Operator hereby grants to Entity a waiver of subrogation which any insurer may acquire against Entity, its officers, officials, employees, and volunteers, from Contractor / Vendor / Operator by virtue of the payment of any loss. Owner/Operator agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation but this provision applies regardless of whether or not the Entity has received a waiver of subrogation endorsement from the insurer. The Workers Compensation policy shall be endorsed with a waiver of subrogation in favor of the Entity for all work performed by the Owner/Operator, its employees, agents, and subcontractors. Subcontractors Owner/Operator shall require and verify that all subcontractors maintain insurance meeting all the requirements stated herein, and Owner/Operator shall ensure that Entity is an additional insured on insurance required from subcontractors. For CGL coverage subcontractors shall provide coverage with a format least as broad as CG

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