SAN FRANCISCO—The real estate industry is one of the leading adopters of drones as businesses look at more efficient ways of photographing listings, in addition to planning and surveying developments. At the end of last month, new FAA regulations took effect, making it easier for companies to use drones for commercial purposes.

The new regulation, Part 107, applies to commercial drone use, not hobby or recreational drones. The changes have been awaited by the unmanned aerial systems (UAS) community for years, and make entry into the commercial drone market substantially easier.

As more industries embrace the use of drones, however, there are risks of which business owners need to be aware. If something goes wrong with a drone, companies can face litigation over property damage, injuries and a myriad of other risks that could affect the bottom line. With drone use skyrocketing in real estate, businesses should ensure the appropriate insurance policies are in place to cover all potential risks.

Shawn Ram, the head of the technology practice at Crystal & Company, one of the largest insurance brokers in the country, recently discussed the risks real estate companies face with drones and how they can be addressed in this exclusive.

Ram tells GlobeSt.com: “There is a tremendous potential for the use of drones in real estate for taking photos of properties and in construction to document the work process and monitor security. However, there are risks that are not covered because aviation is not usually covered under normal policies.”

Ram listed three areas that are insurable under separate policies, including bodily injury/property damage, technology risk/failure and privacy where unintended targets are captured.

For the commercial drone user, part 107 stipulates anyone 16 years old and older who speaks, writes, and understands the English language, in physical and mental condition that does not interfere with safe flight practices, and has been vetted by the Transportation Security Administration can operate a commercial UAS.

In order to be vetted, an operator must register the aircraft with the FAA and mark the aircraft appropriately; pass an initial aeronautical knowledge test through an FAA-approved knowledge testing center unless the operator already holds a Part 61 certificate (often referred to as a pilot's license); pass an online course; apply for and receive a remote pilot airman certificate with a Small Unmanned Aircraft System (sUAS) rating; pass a recurring knowledge test every two years; conduct preflight checks to ensure that UAS are in safe operational condition; fly during daylight or civil twilight, within visual line of sight (VLOS), under 100 mph and under 400 feet; upon request, supply sUAS to the FAA for inspection and testing; report to the FAA within 10 days of any incident resulting in serious injury or property damage exceeding $500 (not including damage to the aircraft).

For commercial purposes, drones must weigh less than 55 pounds (including payloads). An operator cannot fly without a visual observer (unless he or she is breaking visual line of sight with the drone, as in use of first person view devices, then a visual observer is required). An operator cannot operate without an FAA airworthiness certification, pilot's license or Section 333 exemption.

“These new regulations work to harness new innovations safely, to spur job growth, advance critical scientific research and save lives,” says the FAA.

The FAA anticipates that it will be able to issue remote pilot certificates within 10 business days after receiving completed applications.

Ram listed three areas that are insurable under separate policies, including bodily injury/property damage, technology risk/failure and privacy where unintended targets are captured.

“These new regulations work to harness new innovations safely, to spur job growth, advance critical scientific research and save lives,” says the FAA.

The FAA anticipates that it will be able to issue remote pilot certificates within 10 business days after receiving completed applications.

Instant Insights /

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