Construction Law Update: Use of Drones Update 2017


Drones in Construction

The use of unmanned aircrafts, commonly known as drones, has exploded in popularity over the past few years. New applications of drone technology are constantly emerging. The Construction Industry is no exception. Drones can be used to survey entire job sites with ease and reach incredible vantage points without putting an employee in danger. However, with new technology, new laws are sure to follow. The Federal Aviation Administration (FAA) enacted new rules that took effect August 29, 2016, with more to follow in early 2017. The previous rules governing the use of drones were based on the rules of manned aircrafts. The new rules may not yet be perfect but they need to be observed in order to avoid steep civil penalties, up to $1.9 million.

Drone Basics

There are currently two “classes” of users. The first class is “Hobbyist.” Hobbyist use is exactly as it sounds, use of a drone as a hobby. Hobbyists are not allowed to use drones for any commercial purpose. Many hobby drones are much smaller and do not carry as much equipment as one would expect on a commercial drone. Hobbyists still have many of the same requirements as commercial drones, such as height restrictions and registration requirements. Because the vast majority of construction companies will be using drones in connection with commercial construction, they are not likely to fall in the hobbyist classification. It would be unwise to attempt to disguise commercial use as hobby use, as the FAA has already brought several law suits against companies attempting just that. 

The next class of user is “commercial.” Commercial use is also self-explanatory; use in connection with a business purpose. Construction companies using drones will almost always fall within this commercial category when they are surveying sites or photographing sites with drones. 

Drone Benefits

The first basic decision a construction company will want to make is whether or not the use of a drone is beneficial to their business. Benefits of drone use include: savings of time and money when photo documenting/surveying; ease of inspecting hard to reach or dangerous places; ease of inspection of large scale sites; possibility of virtual safety inspections; and the potential to create great promotional material. 

Once a company has decided to use a commercial drone in their business, the company needs to decide whether to purchase their own drone and hire an operator, or contract with a company specifically offering commercial drone services. There are many regulations currently in play that should be carefully considered in making this decision.

Previous Regulations

Previously, in order to operate a commercial drone, the operator or owner must have had a FAA 333 exemption. This exemption was obtained through application to the FAA and was drone model specific as well as purpose specific. If the exemption was for one model of drone, the operator was only allowed to fly that specific model of drone. An operator exempted for the purpose of scanning crops would not be allowed to photograph a construction job site without seeking another exemption for the new purpose. In addition to the FAA 333 exemption, operators of commercial drones were required to be FAA Licensed Pilots. This licensed pilot requirement was due to the fact Congress had yet to pass any other mandate allowing the FAA to regulate drones in the sky any differently than manned aircrafts. Roughly 3,517 FAA 333 exemptions were granted under the old regime. If you were contracting out your drone services, you would want to ensure the company had an FAA 333 exemption. The exemption database can be searched at the FAA website

There were also height restrictions for drone flight. Drones were not allowed to fly higher than 400 feet above the ground. In order to fly higher than 400 feet, special permission had to be sought from the FAA. This obviously presented obstacles for construction companies wishing to survey or photograph buildings taller than 400 feet. In addition to the 400 feet ceiling, drones could not be operated within 500 feet of a “nonparticipating” individual. The law was not clear on vertical versus horizontal requirements for this 500 feet rule, but there clearly had to be some horizontal separation as the operator could not surpass the 400 foot ceiling. The law was also unclear as to what constituted a nonparticipating individual. 

New Regulations

The new regulations were finalized June 21, 2016, and took effect August 29, 2016. The new regulations are known as Part 107. The rules incorporated many of the proposed regulations and comments submitted. Public comment is closed, but the submitted comments are available to view at the regulatory comment website.  More updates are expected to follow.

The new regulations established a new “Remote Pilot in Command” position. The Remote Pilot in Command is in charge of all aspects of drone operation, but need not be the person actually piloting the drone. The Remote Pilot in Command may be the individual on the team with the proper pilot certificate and is the individual tasked with ensuring all drone operation complies with the new rules. The Remote Pilot in Command must have a Remote Pilot Airman Certificate. The certificate can be obtained by proving aeronautical knowledge in one of two ways: 1) pass an initial aeronautical knowledge test administered by the FAA ($150); or 2) by holding a traditional pilot certificate and completing an online drone training course. The new rules also require the Remote Pilot in Command to be 16 years of age or older and must be vetted by the TSA. The Remote Pilot in Command can only command one drone at a time, and is tasked with completing a preflight inspection prior to any operation. 

The rules no longer require an FAA flight worthiness certification of the drone. However, upon request the drone must be made available for inspection and testing. All documents and records relating to the drone must be available as well. The new rules require within 10 days of any accident resulting in serious injury, loss of consciousness, or property damage exceeding $500, that a report be filed with the FAA. The FAA has created a safe harbor and allows the Remote Pilot in Command to deviate from the requirements of Rule 107 to respond to in-flight emergencies.

The new rules still have operational limits. Drones must weigh less than 55 pounds with all equipment attached. The drone must also remain in the visual line of sight of the Remote Pilot in Command, Pilot, or Observer, unaided by any device other than corrective lenses. First-person cameras may be used, but will not satisfy the visual line of sight requirement.  The new rules also impose medical restrictions and drug and alcohol restrictions on individuals involved in the operation of a drone. 

Drones still cannot be operated over nonparticipating individuals. However, the new rules do away with the 500 feet requirement of the previous rules regarding nonparticipating individuals. It is still not clear what constitutes a nonparticipating individual. Best practice may be to require waivers of all individuals on job sites. Drones may only operate in Class G air space, generally 400 feet or below. Operation may only occur during daylight unless proper anti-collision lighting is installed, which allows for twilight operation 30 minutes prior to sunrise and 30 minutes after sunset. Drones must yield to all other aircrafts. Drones may not exceed a ground speed of 100 miles per hour. The maximum altitude for drone flight is still 400 feet, but the new rules allow a drone to exceed 400 feet if the flight is operated within 400 feet of a structure. Drones may not be operated from a moving vehicle or aircraft and may not be operated in a reckless manner. The new rules also impose a ban on carrying hazardous materials. Most of the foregoing new rules are waivable upon application and demonstration to the FAA that the proposed flight can be carried out safely. 

Additional Issues

Additional location issues may arise such as trespassing or privacy concerns. Best practice in avoiding these issues is proper flight planning as well as ensuring an accurate log of every drone flight. Some drones are equipped with GPS “black boxes” that track the exact location of the drone, every second of the flight. Geofencing is another possibility. Geofencing creates an invisible fenced in area that the drone cannot leave no matter what the operator on the ground attempts to do. If the drone being used is not this advanced, the best alternative would be to require an observer for every flight to report the drone’s position back to the operator and to log exactly where the drone was flown.

You will want to ensure that the operator of the drone is properly trained. Many manufacturers will only sell a drone if an operator completes their training program. However additional training and practice is always recommended to ensure operators always have complete control of the drone. Whether you decide to hire out or purchase your own drone, insurance should always be considered. Typical liability insurance purchased by operators covers between $1 million and $5 million pre occurrence. In addition to the operator purchased insurance you may want to purchase “Non-owned insurance.” Non-owned insurance is for companies that hire out their drone services and provides coverage in the event you are unable to recover from the operator or the damages exceed the operator’s limits. Construction companies will want to pay close attention, while drafting contracts, to which party liability will attach or shift should an accident occur. The contract should address damage to: the job site, employees of the parties, 3rd party individuals, 3rd party property, and the drone itself.

The cost of compliance with all of the regulations mentioned up to this point should be considered before deciding whether to purchase and operate a drone or to contract with a drone operating service for your commercial needs. Should you decide to contract out, ensuring the contracting company complies with all regulations and has the proper insurance is of the utmost importance. Should you take this route the majority of the work will be upfront with checking licensing and negotiating/contract drafting. Should you choose to purchase your own drone, the next step is to study up on Rule 107. 

Again, these newest regulations took effect August 29, 2016, and more changes are scheduled for early 2017. The proposed regulations will likely change several times over the coming months, until a final version is passed. When the final version is enacted it will be imperative to ensure all drone operations associated with your business are in compliance with the final version of the rules, whether or not you operate your own drone or contract out. Otherwise you may incur stiff civil penalties.




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