Drones are coming, drones are coming!

Some of you will have already been asked in the course of a consultation visit if your utility has thought about using or even buying a drone. The potential benefits are pretty obvious, particularly when considering the use of drones for aerial line inspections or in storm damage trouble spotting, to choose two obvious examples. It seems likely that electric utilities will at some point in the near future be using camera equipped flying platforms for a variety tasks now done by both manned aircraft and ground-based personnel. It is clear that drones will offer utilities faster and cheaper ways to accomplish many aspects of routine work.

For now, however there are a couple of impediments to achieving this brave new world of drones. Costs are still high for a commercially functional drone that a utility can use in its work. More significantly, the regulatory situation remains uncertain. Although the potential benefits are clear, such as aerial inspections for businesses, advances in movie making, or in enhancing real estate listings, there are some significant negatives too. Drones can also be used to snoop on people and harass them, they can threaten other aircraft, and they can cause damage or injury if they crash. Right now, federal, state, and local government entities are all involved in the effort to claim primacy in the rule making process, and there are plenty of valid concerns that have to be delicately balanced. Privacy vs. efficiency is a challenge to be faced, as is the need to keep drones separate from airspace used by manned aircraft as well. No one I know wants to see airborne cameras hovering 30’ above their yards, while nearly everyone sees some potential benefits to private and commercial drone use. While these issues will no doubt eventually be settled in some fashion through the political process, right now the rules are very unsettled. The FAA initially required that all drones be operated by licensed operators and used only on a “line of sight” basis, despite the fact that remote operation is one of the big advantages drones offer to commercial users. The rules on this issue are likely to be the center of a very contentious process, and you can expect them to change, perhaps several times, before a solution is found that will stick.

Regardless of your position on these issues, there is a clear danger to your utility should you purchase a drone. Not only will you have to follow a rapidly developing set of rules and regulations, you will also need to get insurance for it, not so much for the drone’s value to you as for the liability you run while operating it. Over the years, you may have gotten used to being regularly asked if you have any owned or leased aircraft or watercraft. This comes up because the coverage provided for your utility through our program carries industry standard exclusions that specifically deny any coverage for liability arising out of the ownership, operation, maintenance or use of any aircraft. And a flying drone is undeniably an “aircraft.” So, no protection for you if you buy a drone! The good news is that our carriers are providing, on a case by case basis, a special endorsement that provides liability coverage for specified drones. And we have one already that we cover. One of our clients, a G&T cooperative, has purchased a drone to use in transmission line inspection work. They reported it to their agent and the carrier issued a special endorsement to cover it, for a modest additional premium. So, if you take on this type of exposure, this program can help cover it for you. But you need to tell your agent immediately if you are considering adding a drone to your arsenal of equipment.

If you buy a drone, pick up your phone. (And call your insurance agent to report it.)