Guide to Unmanned Aircraft Systems (UAS)

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Aon Risk SolutionsAon Broking | Aviation

Guide to Unmanned Aircraft Systems (UAS)February 2016

Unmanned Aircraft Systems (UAS) 2

Unmanned Aircraft Systems (UAS) . . . . . . . . . . . . . . . . . . . . . . . . .3

What is a UA and UAS? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Legal Case Study: FAA v. Raphael Pirker . . . . . . . . . . . . . . . . . . . . .5

FAA Regulations Governing UAS Operations in the US . . . . . . . . .6

Know Before You Fly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Notice of Proposed Rulemaking (NPRM) . . . . . . . . . . . . . . . . . . . .7

Fines & Penalties – Not Covered by Insurance . . . . . . . . . . . . . . . .7

UAS Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Insurance Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Potential UAS Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Aviation Coverage Considerations . . . . . . . . . . . . . . . . . . . . . 10-11

UAS Aviation Policy Forms – Civil & Governmental Use . . . . . 12-13

Risk Mitigation – In House . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14-15

Risk Mitigation – 3rd Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Additional Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Table of Contents


Unmanned Aircraft Systems (UAS)

Unmanned Aircraft Systems (UAS) usage is expected to dramatically increase over the next five years. After the passing of the FAA Modernization and Reform Act of 2012, the FAA, under the direction of the Secretary of Transportation, gained authorization to begin integration of civil Unmanned Aircraft Systems into the National Air Space (NAS). In conjunction with the US Congress and state and local agencies, the FAA is working to create regulations on recreational and commercial applications that allow more streamlined access of unmanned aircraft to American businesses and institutions*. It is important to keep current with UAS regulations and news by following updates from the FAA, your aviation legal counsel, and your insurance broker.

This document is to serve as a guide to touch on some UAS legal history and recent changes, typical insurance coverage considerations, recommendations on best risk management practices, and sources of additional information to research.

*Many changes have occurred over the past year and some of the information in this presentation may have changed since its production.


What is a UA and UAS?*

The term ‘‘unmanned aircraft’’ (UA) means an aircraft that is operated without the possibility of direct human intervention from within or on the aircraft.

An Unmanned Aircraft System (UAS) consists of the unmanned aircraft and all of the associated support equipment, control station, data links, telemetry, communications and navigation equipment, and the like, necessary to operate the UA. 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. The FAA issues an experimental airworthiness certificate for the entire system, not just the flying portion of the system.

Please note that unmanned aircraft are described in many different terms. Below is a list of some terms that you may come into contact with to describe unmanned aircraft.

• Unmanned Aircraft Systems (UAS)• Unmanned Aircraft (UA)• Unmanned Aerial Vehicle (UAV)• Remote Controlled (RC) Aircraft• Radio Controlled Aircraft

• Remotely Piloted Vehicle (RPV)• Remotely Piloted Aircraft System (RPAS)• Model Aircraft• Drone

*FAA Modernization and Reform Act of 2012

It is also important to note that the FAA considers an aircraft as “any” “device” that is “used for flight.” This could mean that anything that can be flown in the NAS undetached from an operator, with or without its own power source, could be considered an “aircraft.” This includes many smallUAS that were never previously considered to be of any issue to the FAA as an aircraft. The operation of an “unmanned aircraft” typically requires the use of an operator and a control used by the operator to fly the aircraft. This is what is designated as the entire “unmanned aircraft system.”


Legal Case Study: FAA v. Raphael Pirker

UAS have been used for commercial applications in several foreign countries for over 10 years. The number of commercial UAS operations in the United States has not been significant until recently. Aviation laws were ambiguous as these aircraft did not exist when the laws were written or updated. Because our National Airspace System (NAS) is very complex and generally sees significant traffic, the FAA and Congress are becoming more involved in the regulation of UAS operations to maintain safety to the public. The demand for commercial uses and availability of unmanned aircraft has surpassed the FAA’s ability to keep up with regulations for these uses. The case below is perhaps the first legal case against a UAS operator in the United States and has set the precedence for the FAA to regulate the commercial use of these aircraft.

Please see the full NTSB Docket CP-217 for specifics on the case.

Timeline

2011 October 17

Raphael Pirker is paid to film an advertisement at the University of Virginia in Charlottesville, VA using his 5 lb. Ritewing Zephyr unmanned aircraft.

2013 June 27

The FAA orders Pirker to pay a civil penalty in the amount of $10,000 based on a violation of 14 C.F.R. § 91.13(a) for alleged careless or reckless operation of an unmanned aircraft. The complaint alleged respondent operated the unmanned aircraft at altitudes ranging from the “extremely low”—10 feet above ground level (AGL)—up to 1,500 feet AGL. In the complaint, the Administrator also asserted respondent operated the aircraft, inter alia, “directly towards an individual standing on a . . . sidewalk causing the individual to take immediate evasive maneuvers so as to avoid being struck by [the] aircraft”; “through a . . . tunnel containing moving vehicles”; “under a crane”; “below tree top level over a tree lined walkway”; “under an elevated pedestrian walkway”; and “within approximately 100 feet of an active heliport.” Respondent allegedly conducted these maneuvers as part of flights for compensation, as the aircraft was equipped with a camera and respondent was “being paid by [a third party] to supply aerial photographs and video of the UVA campus and medical center.”

2014 March 6

Pirker argues the aircraft was a “model aircraft” not subject to the regulatory provisions applicable to “aircraft.”

Administrative Law Judge Patrick G. Geraghty terminates the enforcement proceeding against Pirker, and found § 91.13(a) did not apply to Pirker’s unmanned aircraft because the device was not an “aircraft” for purposes of the regulation.

2014 November 18

NTSB overturns Administrative Law Judge Patrick G. Geraghty ruling.

2015 January

Raphael Pirker settles with the FAA and pays a fine of $1,100, but does not admit any regulatory violation.

Outcome

1. Definition of “Aircraft”: This case determines that UAS are affirmed as an “aircraft” for purposes of § 91.13(a), which prohibits any “person” from “operat[ing] an aircraft in a careless or reckless manner so as to endanger the life or property of another.” It has further determined that an aircraft is “any” “device” that is “used for flight.”

2. The FAA can regulate UAS: Because UAS are considered “aircraft,” the FAA has the authority to regulate aircraft flying within the National Airspace System


FAA Regulations Governing UAS Operations in the United States

As a result of the FAA v. Raphael Pirker case, all operation of UAS within the United States is governed by the rules and regulations of the FAA. Countries outside of the United States may or may not have laws governing their operation and it is important to know the rules and regulations that are specific to each country. Because UAS operators may not be familiar with FAA regulations (FARs), many in your organization may not understand that unmanned aircraft are subject to federal rules and regulations and their operation may need to be covered under your insurance program.

Important FAA recommendations or requirements for Commercial Operations:

• UAS are classified into three categories:

• Public Operations (Governmental)

• Civil Operations (Non-Governmental)

• Model Aircraft (Hobby or Recreation Only)

• Any use of UAS that is not considered recreational or hobby is considered a Civil (Commercial) or Governmental use and requires one of the following to fly legally:

• Special Airworthiness Certificate (SAC)

• Section 333 Exemption

• Certificate of Authorization or Waiver (COA)

• All UAS used for commercial purposes MUST be registered by the FAA per 14 CFR Part 47

• Unless approved by the FAA, UAS use must generally be flown:

• during daytime Visual Flight Rules (VFR) conditions

• within visual-line-of-sight (VLOS)

• less than 400 ft. AGL

• maintain certain specified distances from active airports and heliports

• An appropriate pilot certification is required for any commercial or governmental operation of UAS in the National Air Space (NAS).

Know Before You Fly

The Association for Unmanned Vehicle Systems International (AUVSI) and the Academy of Model Aeronautics (AMA) have partnered with the FAA to educate prospective users about the safe and responsible operation of UAS. Please visit this website to learn more: www.knowbeforeyoufly.org

FAA Information on UAS: http://www.faa.gov/uas/

Regulations & Policies: http://www.faa.gov/uas/regulations_policies

UAS Registration: http://www.faa.gov/uas/registration/


Fines & Penalties – Not Covered by Insurance

It is important to understand that your insurance policy will never cover:

• The cost of fines or penalties that are imposed as a result of your failure to comply with local and federal laws or negligence/reckless operation.

• Any legal fees and costs associated with defending or settling any fines or penalties.

• Illegal activity performed by the insured (including any executive officers, partners, or managing agents), at the insured’s direction, or with the insured’s knowledge unless otherwise noted in the policy.

Cost of Fines & Penalties

The cost of unlawful or reckless operation of unmanned aircraft can be very expensive. Fines have ranged from several hundred dollars to a record $1.9M penalty that was recently brought against a commercial operator.

Notice of Proposed Rulemaking (NPRM)

For many years, model aircraft, which could be argued to be UAS, were lightly regulated by the FAA. Until the prevalence and growth of commercial use of UAS came to fruition, there was no clear law or regulation applicable to these operations. With the FAA Modernization Act of 2012, a path was made to develop and implement the integration of UAS into the National Air Space. In February 2015, the FAA released its Notice of Proposed Rulemaking (NPRM) for small UAS operation. This would typically include UAS that weigh less than 55 lbs. This public notice does not change any current laws or regulations, but it does address the FAAs desire for integration of small UAS and allows the public to comment as rules and regulations are developed.

Information and an overview of the NPRM can be found at the FAA website: https://www.faa.gov/uas/nprm/


Source: Munich Re America 2015 Drones SurveyMethodology: Munich Re America’s 2015 Drone Survey was conducted on-site at the Risk and Insurance Management Society Conference (RIMS) in New Orleans, LA on April 27, 2015. It is intended to represent the sentiments of 100 risk manager attendees who participated through in-person interviews, and who were primarily from large and mid-size companies doing business in the US, Europe, Asia, Australia/Oceania and Africa.

What is the greatest risk of using drones for business purposes according to risk managers surveyed?

40%Businesses estimated to

use drones by 2020

30,000Estimated number of commercial and civil

drones in the skies by 2020 (FAA)

100,000Estimated number of jobs created between 2015 and 2025 (AUVSI)

US $82BEstimated contribution to the

US economy (AUVSI)

69%Invasion of privacy

12%Inadequate insurance

11%Bodily injury

8%Property damage

UAS Statistics*


Insurance Market

While the UAS industry is relatively new and booming in the United States, there have already been several high profile international losses and lawsuits against UAS operators. Over the past several years, incidents have also occurred within the United States. The UAS industry has been very lucrative in many areas of the world, especially Asia, Australia, and Europe. Rules and regulations applicable to UAS risks are dependent on the specific jurisdiction in which the operator is domiciled or where the operations occur.

Your insurance carrier will provide legal defense in the event of a loss. Because of the lack of litigation experience and data on loss settlements, the insurance market for UAS is very unstable and rates could change at any time. Additionally, the cost of litigation has the potential to be very lengthy and expensive due to the lack of precedence to base court decisions and settlements. The absence of specific laws governing UAS operations is also an area of concern when legal cases are presented. While bodily injury and property damage claims are certainly a significant area of concern, the potential personal injury (violation of another’s privacy) claims is uncharted territory. Regardless of whether an insured is legally required to compensate a third party, the cost of litigation is a significant area of concern for insurers.

Most UAS policies are very reasonably priced in the aviation insurance market. This is especially true for risks that are operating legally and in less urban areas. The UAS aviation insurance market is changing and adaptable as insurers consider coverage offerings. The trend for most non-aviation casualty insurers is moving towards excluding these risks specifically. Depending on the risk appetite of your casualty insurer, the UAS may not be included on the CGL or Umbrella policy. Over the past year, many carriers have begun to utilize the new ISO policy forms and endorsements or create their own policy forms and endorsements to exclude UAS specifically. This will be something to watch for as current UAS placements enter a renewal cycle and new operations create a need for insurance coverage.

Potential UAS Uses

• Oil/Gas/Electric – pipeline & powerline patrol, flare tip inspection, surveying, mapping

• Agriculture – aerial survey, crop dusting/spraying

• Construction/Real Estate – aerial site survey, inspection, aerial photography

• Entertainment – aerial filming/photography

• Maintenance – building Inspection, damage assessment

• Engineering – survey, measurement

• Electronic News Gathering

• Government/Municipal

• Retail – package and product delivery

• Tech – Internet service, surveillance, security

• Weather & Environmental Data Collection


Aviation Coverage Considerations

There are several coverage considerations to be aware of when placing a UAS policy. Below are some items of particular interest to be aware of.

Policy Form Third-party liability insurance for owned UAS can be underwritten in three ways:• Aviation UAS Policy: The aviation policy may be written specifically for UAS, or the

carrier may elect to write this using an Aircraft Hull & Liability Policy or as an Aviation Commercial General Liability Policy (with an endorsement).

• Commercial General Liability Policy: The definition and the UAS (either blanket wording or scheduled) would need to be endorsed to the policy.

• Commercial Excess or Umbrella Liability Policy: This policy would follow excess of another UAS insurance policy or Self Insured Retention (SIR). The definition and the UAS (either blanket wording or scheduled) would need to be endorsed to the policy.

Bodily Injury &Property Damage

Per Occurrence vs Aggregate Limit: If the policy is written on a Commercial General Liability form, there may be an aggregate limit. Because litigation for these cases may take years for asettlement to be reached, the limit could be exhausted before your claim can be made. A “per occurrence” limit is preferable

Definition of UAS The Pirker case has defined UAS as an aircraft. Does the policy definition sufficiently includeUAS according to the FAA definition?

Aircraft Schedule Does the policy contain blanket coverage for UAS or is the aircraft scheduled? If the UAS are specifically scheduled, is the UAS in operation the exact same aircraft? Does the serial number and model listed in the policy match the aircraft? Each UAS will need to be specifically named in the UAS Hull & Liability policy. If there are many UAS and the insured is not aware of the exact number, blanket wording and timely reporting can be used to ensure all UAS are covered.

AirworthinessCertificateExclusion

Many aviation policies exclude aircraft that do not have an airworthiness certificate. BecauseUAS do not maintain an airworthiness certificate, this needs to be deleted or a write-back issued for UAS use.


Aviation Coverage Considerations

Non-OwnedAircraft Liability

This coverage will respond if the primary coverage is exhausted, if the claim is denied, or there is no coverage in place. When a 3rd party UAS operator is utilized or when your employees fly or work on a project with a 3rd party UAS operator, non-owned aircraft liability that includes UAS operations should be included. A certificate of insurance indicating the Named Insured (and any other entities or broad wording) is added as an additional insured should be obtained from the 3rd party operator every time. There may be no coverage when an operator is using the UAS for recreational use or has not obtained the permission of the Named Insured to operate the UAS on owned property.

Personal InjuryLiability

The main concern with personal injury liability is the “violation of an individual’s right of privacy.” We are unsure of how common law, state laws, federal laws, or the Fourth Amendment will apply to the violation of privacy until specific laws are passed or a court case sets precedence. With the technology available, it is reasonable to assume that, even unknowingly, a UAS could violate the presumption an individual has on their privacy because UAS are often able to gain unique vantage points that are often undetected due to their size and quiet operation.

War Liability It is possible for a UAS to be misused by an authorized person, stolen or “hacked” and “hijacked” and used for a non-intended purpose, such as sabotage, criminal acts, or terrorism. Depending on the war exclusion in the policy, this coverage may need to be written back into the policy.

Areas of Use Most UAS policies will include US territory and will need to be underwritten for any exposures located outside of the territory included in your policy.

AutomaticAttachment

Because there may be owned UAS within your organization that risk management and theirinsurer are unaware of, automatic attachment would be beneficial. However, this is the very reason some insurers do not want to include this coverage extension.

Medical Payments In many cases, bodily injury and property damage payments may be very minimal. Medicalpayments are helpful in satisfying an injured party while also not admitting fault. Medicalpayments can help to avoid litigation and thus keep losses low.


UAS Aviation Policy Forms – Civil & Governmental Use

Several policy forms are available to provide insurance coverage for businesses involved in the UAS industry. There are a handful of insurance carriers that are willing to provide coverage to businesses seeking insurance for their UAS operations. While each insurer may be unique in the criteria required and the exposures they are willing to insure, there are many options to provide a complete insurance program that will protect your UAS interests. Some coverages can be underwritten on a single policy form, but some may require multiple insurance forms to satisfy the exposures specific to each operation. Detailed underwriting information should be provided to your broker to ensure all exposures are considered and a determination can be made on how to properly insure your entire operation.

Policy FormExposures thatcan be covered

Description

UAS Hull & Liability • Physical Damage of UAS• 3rd Party Bodily Injury &

Property Damage• Personal Injury Liability• Non-Owned UAS Liability• Non-Owned UAS

Physical Damage• Products Liability –

Sale of UAS Only• Non-Owned Premises Liability• War Coverage for Physical

Damage and Liability• Hangarkeepers Liability

This policy is intended to cover theactual physical damage to the UAScaused by a covered occurrence andthird party legal liability for bodily injury & property damage. This policy can also be purchased without physical damage. Additional coverages can be added to the policy, usually for an additional premium.

Policy Intended to Cover: Civil or Governmental Use UAS Owner/Operators

Non-Owned UAS Liability • Physical Damage of Non-Owned UAS

• 3rd Party Bodily Injury & Property Damage

• Owned Premises Liability• Non-Owned Premises Liability• War Liability• Hangarkeepers Liability

The non-owned UAS policy is intendedto cover losses caused by a UAS that isnot owned by the Named Insured, but is used by or on behalf of the NamedInsured. For occurrences that occur onyour property caused by non-ownedUAS operation not completed for or onbehalf of the Named Insured., a GeneralLiability policy (discussed below) willrespond to coverage.

Policy Intended to Cover: Contractors of Civil or Governmental Use UAS Operators

Products, CompletedOperations, & GroundingLiability

• Products Liability• Completed Operations Liability• Grounding Liability• Premises Liability• War Liability• Hangarkeepers Liability

This policy is intended to providecoverage for property damage andbodily injury losses that may occur as aresult of a defective productmanufactured by the Named Insured orthe work completed by the NamedInsured. This coverage may apply toUAS that are homebuilt or modified andsold to a third party.

Policy Intended to Cover: UAS and UAS components manufacturers, UAS maintenance facilities


UAS Aviation Policy Forms – Civil & Governmental Use

Policy FormExposures thatcan be covered

Description

War Liability • War, acts of foreign enemies, etc.• Terrorist acts (not including TRIA)• Any malicious act or act

of sabotage• Confiscation or seizure under

the order of the government or local authority

• Hi-jacking or any unlawful seizure or wrongful exercise of control of the Aircraft

The War, Hijacking, and Other PerilsExclusion is typically included in allaviation policies. Some non-aviationpolicies will have similar war exclusions.This exclusion write-back is typicallyadded to another policy form. However,there may be cases where the primaryinsurer is unwilling to offer the coverageor may not be able to provide thecapacity to cover very high limits ofliability. In this case, a stand-alonepolicy can be written.

Policy Intended to Cover: Any policyholder that maintains a UAS related risk.

Recreational UAS operators may also purchase UAS Hull & Liability, Personal Injury Liability, or Excess Liability. Clients need to speak with their personal lines agent to determine the appropriate coverages for their specific recreational UAS risks.


Risk Mitigation – In House

There are many people who look at UAS as mobile equipment or even as a toy, and do not understand that UAS are aircraft and should be treated as such. There are many benefits to using UAS in your business. They are often less expensive than using fixed or rotor-wing aircraft to gain certain vantage points, and they can be used to replace sending your employees into locations that may be dangerous or difficult to get to. Often one of the largest barriers to ensuring safe operation is getting the information to everyone in your organization on company policy regarding UAS usage. Below are some items to consider to help control this risk within your organization.

Know the Law Laws in relation to UAS operations are changing on a regular basis. For US based risks, there are several online resources that can help businesses understand US laws and safe operation of UAS, such as the FAA Website and the Know Before You Fly website. Operations of UAS in Canada and the European Union are subject to their specific rules and regulations, whereas UAS operations in other parts of the world may or may not be subject to specific regulations. Obtain local country legal advice prior to conducting any UAS operations outside of the United States.”

Company Policy A formal company policy should be developed to control operation of UAS within your organization. One of the largest obstacles to ensuring your employees follow this policy is ensuring that they know and understand the policy. In order to achieve this, there may need to be more formal notification and training. It may also be beneficial to make contact with departments that may have a need to use UAS to see what their plans may be.

Proactive Approach Create “No Drone Zones” and utilize signage in areas that might see heavy human traffic or may pose a risk of privacy violation. It may also be important to address staff regarding policy concerns and what processes to complete to utilize UAS in their respective departments.

Understand Your Exposure

It is important to understand exactly what your exposures are in relation to UAS operations. Talk with your departments to understand what they are currently using UAS for and if they have plans to utilize these aircraft in the future. Your insurance broker may also be able to determine if similar operations are utilizing UAS in their businesses and provide advice on what to look for.

Industry Organizations

There are a number of UAS organizations that are designed to help businesses and individuals understand proper and legal operation of UAS, such as the Association for Unmanned Vehicle Systems International (AUVSI) and the Academy of Model Aeronautics (AMA). Membership to these industry organizations often includes member-only training and publications and they may offer additional services at a discount to aid in your UAS operations.

Safety & Loss Control

Many insurance carriers can provide Safety & Loss Control (S&LC) services to their insureds at no additional cost to you. Currently, few can offer any formal training on UAS operations, but many are working with industry consultants that will provided discounted services to your company to help design and maintain a working UAS program. Additionally, your insurance carriers’ S&LC staff can audit the program you currently have in place to provide recommendations and improvements for safe operations.


Risk Mitigation – In House

Standard OperatingProcedures (SOPs)

Each company can develop SOPs that should be adamantly followed to ensure safeoperation of UAS. Several industry organizations offer sample SOPs which can betailored to meet your specific needs. The SOPs will outline emergency response,pilot training, operation procedures, and other environmental factors.

Pilot Training Because UAS operate in the National Airspace System (NAS), it is also important that your pilots understand the FAA Regulations (FARs) which may require that your employee UAS operators undergo some form of formal pilot training. Additionally, each organization may want to designate a “Chief Pilot” or panel that determines pilot eligibility for members of your organization. Pilots should meet the minimum requirements as required by law.

Currently, the general perception of the FAA is that commercial UAS operators should hold a Sport Pilot License to operate an unmanned aircraft within the NAS. If a pilot is not operating within the NAS, they may be able to operate the unmanned aircraft. You should consult with your aviation attorney, UAS consultant, or Chief pilot to determine what would be considered part of the NAS in relation to your operations area and if this will sufficiently cover pilots who are operating your owned and non-owned UAS exposures.

Sport Pilot Certification: https://www.faa.gov/licenses_certificates/airmen_certification/sport_pilot/media/LSPBrochure.pdf

UAS Equipment In addition to determining if the specific make and model best fits your UAS needs,there are some additional considerations that can make an impact on safe operation:• Avoidance & Anti-Collision Technology – many UAS are already outfitted with

this equipment and the FAA may require that this equipment is used in all UAS in the future.

• Batteries – most UAS use Lithium Ion batteries, which are known to be very flammable. Be aware of the type of batteries used and the duration of flight they are able to maintain.

Technology Currently in the UAS market and also in development are several software limiting capabilities that can be utilized with your Unmanned Aircraft System that can aid in avoiding human error that may break laws. Such devices include, but are not limited to, altitude and parameter control and collision avoidance systems (CAS).

https://www.faa.gov/licenses_certificates/airmen_certification/sport_pilot/media/LSPBrochure.pdf

https://www.faa.gov/licenses_certificates/airmen_certification/sport_pilot/media/LSPBrochure.pdf


Risk Mitigation – 3rd Parties

Third parties create a non-owned UAS exposure. While there may be benefits, it is also important to understand that you are relenting some control over the UAS operations. Planning ahead can help to avoid any additional risk to your organization.

Contractual Agreements

When working with any third party, a contractual agreement outlining the work to becompleted and insurance requirements should be in place. Whether any monetarycompensation is involved is not important. A third party may be hired to completework for you or on your behalf or a collaborative effort may create a relationshipcould make your company legally liable for any negligence or loss settlements.

Certificates of Insurance

When working with a third party, it is always important to ensure that they maintaininsurance coverage from an A rated insurer and that a certificate of insurance isprovided. Each certificate should include:• Minimum limit of liability for Bodily Injury & Property Damage• Additional Insured• Waiver of Subrogation for Physical Damage• Other considerations: Personal Injury Liability, War Liability,

Premises Liability, Policy Territory

Premises Operations

You may have no control over a non-owned UAS that happens to fly into yourpremises regardless of measures taken to prevent it. You may also have no issuewith UAS flying recreationally on your property. In this case, your CGL policy shouldspecifically include UAS operations.

Legal Operation

To avoid penalties, fines, and potential legal liabilities associated with illegal operations, ensure your UAS operations or contracted UAS operator work within the legal guidelines set forth by the FAA or equivalent local aviation authority, federal, and local governing bodies. At this time in the United States, all Civil and Governmental UAS operators must also obtain a Section 333 exemption or Certificate of Waiver or Authorization from the FAA. The FAA website includes a directory of all applications and approval documents for each operator that are accessible to the public.

Contacts

First [email protected]






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About the Business Unit

Contacts

East Coast:

Joshua [email protected]

Southwest:

Jason Hendrix, [email protected]

Rose Marie Norman, CIC, [email protected]

Central:

John Geisen, CPCU [email protected]

West Coast:

Gordon Schick, CPCU, ARM, [email protected]

To obtain a quote, please provide:• UAS Application

• UAS Operator Pilot History Form

• UAS Operating Procedures

Additional Resources

Any representations made in the websites below are not the opinion of ARS or any affiliated companies and are only to be considered as reference. Further Aon Risk Solutions does not endorse the credibility of any of these third party entities or the information provided through their resources online or elsewhere.

Know Before You Fly http://knowbeforeyoufly.org/

FAA – Unmanned Aircraft Systems http://www.faa.gov/uas/

FAA – Unmanned Aircraft Systems Regulations & Policies

http://www.faa.gov/uas/regulations_policies/

Sec. 331-341 of the FAA Modernization and Reform Act of 2012 related to Unmanned Aircraft Systems

https://www.faa.gov/uas/media/Sec_331_336_UAS.pdf

Small UAS Notice of Proposed Rulemaking (NPRM) https://www.faa.gov/uas/nprm/

NTSB Opinion and Order, FAA v. Raphael Pirker http://www.ntsb.gov/legal/alj/Documents/5730.pdf

White House/Presidential Memorandum: https://www.whitehouse.gov/the-press-office/2015/02/15/factsheet- promoting-economic-competitiveness-whilesafeguarding- privacy

Munich Re Drone Survey: http://www.munichre.com/us/property-casualty/press-news/press-releases/2015/150513-drones/index.html

ISO’s drone resource center: http://www.verisk.com/iso/drones.html

ICAO RPAS iKit http://cfapp.icao.int/tools/ikit/rpasikit/story.html

Association for Unmanned Vehicle Systems International (AUVSI)

http://www.auvsi.org/home

Academy of Model Aeronautics (AMA) http://www.modelaircraft.org/

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Guide to Unmanned Aircraft Systems (UAS)

Engineering

Transcript of Guide to Unmanned Aircraft Systems (UAS)