Drones In The Construction Industry

Michael C. Kelley | Shutts & Bowen

In just a few short years, drones and the real-time data they collect have contributed to improvements across the construction industry, from overall project efficiency to visual progress reporting for clients and stakeholders. Many builders and owners are using drones to help document construction progress, particularly the turnover process, on projects that are often huge in scope and on sites that are often across a large swath of land. Engineers, design professionals and some subcontractors are using drones for planning and overall design or bid calculations, because they can see and analyze the project at a glance, in addition to being able to get close to otherwise hard to reach locations. The collection of real-time, visual and accurate data is collected immediately from a drone, as opposed to the slow and labor-intensive process of walking a site by foot. New innovations in software are making data collection by drone easier today than it has ever been in the past.

Drones are great for data collection, surveillance, aerial photography, surveying, documentation of construction progress, agriculture, search and rescue, and for advertising and marketing. But drone usage raises a number of legal concerns including privacy, safety and proper insurance coverage, as well as a duty to maintain video and still photo records made by drones. There can also be civil and criminal penalties associated with using drones – whether contractors or construction companies are aware of such, or not.

Construction companies using drones or individuals piloting unmanned aircrafts from a construction site, should consider whether the drone qualifies as an “aircraft” under their insurance policy, and if so, whether using, or even owning, the aircraft triggers an exclusion to coverage they otherwise believe they have. Having an established relationship with an attorney who understands the ins-and-outs of insurance coverage issues can be especially helpful. Construction attorneys are particularly adept at these issues, routinely resolving insurance coverage disputes and helping proactive businesses to avoid unanticipated liability issues by performing a review of existing operations.

Another common legal issue with drones is trespass and invasion of privacy. Individuals should refrain from engaging in an activity with a drone that would be illegal if a person was to do it themselves.

Finally, issues surrounding liability for relying on information procured by the use of drones (was it reasonable or negligent to so rely?), as well as a duty to maintain records (for how long?) created by drones, are still developing and will be litigated well into the future.

As with many remedies, an ounce of prevention is typically worth (in the litigation context) tens, if not hundreds of thousands of dollars of cure. If construction entities have questions concerning their commercial use of drones – whether related to fulfillment of major contract obligations or just to market the latest success story – they should seek competent legal counsel.

New FAA Drone Rules Clear the Path for Use in Development and Construction

Virginia Trunkes | Robinson and Cole

As was recently reported in Robinson+Cole’s Data Privacy + Cybersecurity Insider, the Federal Aviation Administration (FAA) issued two Final Rules for unmanned aircraft systems (UAS), i.e., drones: (1) requiring Remote Identification (Remote ID Rule), and (2) authorizing small UAS (weighing less than 55 pounds) to fly over people and at night under certain conditions (Operations Over People and at Night Rule). While both new Rules are relevant to the real estate development and construction industry, the Operations Over People and at Night Rule has particular significance, offering many benefits.

The Remote ID Rule requires all UAS, whether flown for recreational or commercial purposes, to broadcast identification, location, and performance information. This can be achieved by using either a UAS with built-in capabilities, or one to which a remote-identification-broadcast module may attach. (Or, if operating a UAS without Remote ID, the device may be used only at specific FAA-recognized identification areas.) Remote identification will provide the FAA and other administrative agencies with an awareness of which UAS are using the United States’ airspace, and with the ability to distinguish compliant airspace users from those potentially posing a safety or security risk.

Addressing a different aspect of safety, the Operations Over People and at Night Rule modifies the existing rules that do not permit small UAS to operate at night or over people without a waiver. As of this writing, the FAA has granted almost 5,000 “Part 107 waivers” since it first began authorizing exceptions to otherwise prohibited uses of small UAS in January 2017. (The prohibitions have included exceeding 400 feet above ground level, flying beyond visual line of sight, flying over people, and flying at night.) While the waiver procedure has been manageable, eliminating paperwork and waiting periods should accelerate the use of UAS for business.

Although the Operations Over People and at Night Rule contains various ancillary requirements and limitations interspersed throughout (such as prohibiting or limiting sustained flight over open-air assemblies), its primary mandates are straightforward. It automatically permits UAS operations over people, so long as the operation meets the requirements of one of four operational categories. These categories are divided based on weight of the device (Category 1 involves devices weighing 0.55 pounds or less), and to what extent the device would cause injury to a person struck by 11 foot-pounds (Category 2) or 25 foot-pounds (Category 3) of kinetic energy, with the blanket prohibition against “any exposed rotating parts that could lacerate human skin on impact with a human being” and devices with safety defects. Category 4 permits operations over people for small UAS that have been issued an airworthiness certificate under part 21, “so long as the operating limitations specified in the approved Flight Manual, or as otherwise specified by the Administrator, do not prohibit operations over human beings.” Operations over people include over moving vehicles, so long as (1) the small UAS is within or over a closed- or restricted-access site where any human being located inside a moving vehicle within the closed- or restricted-access site is on notice that a small unmanned aircraft may fly over them; or (2) otherwise the small UAS must not maintain a sustained flight.

That part of the Operations Over People and at Night Rule permitting night operations updates the initial Remote Pilot knowledge test to include an operation-at-night knowledge area, and replaces the requirement that remote pilots complete an in-person recurrent test every 24 calendar months with online recurrent training that offers night operations instruction. The rule allows routine operations of small UAS at night under two conditions: (1) the remote pilot must complete a current initial-knowledge test or recurrent training, and (2) the device must have lighted anti-collision lighting visible for at least three (3) statute miles and an operational flash rate sufficient to avoid a collision.

With this new flexibility, the use of UAS can be expanded significantly. During construction of buildings in densely populated areas, they can be used to track the project’s progress, e.g., solidity of the structures, how aesthetically pleasing they are developing, and where they are moving out of the plan. UAS also can be used for safety inspections, observing general employee conduct and monitoring for trespassing or theft. The added ability to use drones at night permits after-dark surveillance through the use of FLIR (Forward Looking InfraRed) and other night-vision imaging utilities. With UAS remaining cheaper to fly than manned aircrafts, faster than human surveyors, and more agile than 24-hour security officers, the FAA’s Operations Over People and at Night Rule offers a boost to the real estate development industry.

Guidance on Using Drones for Real Estate and Construction in Dense Cities: How Much Does the Public Value Privacy? (Part II)

Kathryn Rattigan | Construction Law Zone

As our previous post stated, the commercial use of drones, or small unmanned aerial systems (sUAS), for urban real estate and construction has gained some traction with the passage of the New York City Council’s bill requiring the Department of Buildings (DOB) to study the feasibility of using sUAS to inspect building facades. With this new bill, as well as other metropolitan cities surely following suit, one of the biggest issues on the forefront for the public at large is privacy.

Think about it: how would you feel if a drone flew over your house while you were in your private backyard, enclosed by a fence, sunbathing? Watering your garden? Playing soccer with your kids? Or sitting at your desk and a drone hovered by your window? Your answer probably rests on who was flying the drone and the reason why they were flying the drone. However, generally, if you are like others across the U.S., you would probably have some privacy concerns. As bills like the New York City Council’s bill above pass, the public wants to know how these proliferous drones will affect their privacy and what the legal limits are for these drones.

The Federal Aviation Administration’s (FAA) sUAS regulations (Part 107) do not address privacy issues. Essentially, as long as the drone operator is compliant with operational restrictions and obtained appropriate waivers and permissions as needed, there are no other federal restrictions regarding flights when it comes to preserving public privacy -even over your backyard or in front of your office window in the skyscraper where you work.

If you look at the public perception of drones and privacy, generally (of 1,047 participants in a recent study from last year by the College of Aviation at Embry-Riddle Aeronautical University) most people said that they were not concerned about hobbyists, construction and real estate companies, but more concerned with drones operated by the government, military or law enforcement, with unmarked drones generating the most privacy concerns.

So where do we stand on privacy and drones in the United States? Well, it’s a gray area. As noted above, the FAA’s Part 107 rule does not specifically deal with privacy issues, and the FAA does not (and has not agreed to) regulate how sUAS gather data on people or property. The FAA says that it “strongly encourages all [s]UAS pilots to check local and state laws before gathering information through remote sensing technology or photography.” Where does that leave us? Where should companies look for guidance?

Back in 2016, privacy groups and industry stakeholders that were participating in the National Telecommunications & Information Administration (NTIA) Multi-Stakeholder process released a set of best practices for commercial and private drone use. Participants included Amazon, AUVSI, Center for Democracy and Technology, Consumer Technology Association, CTIA, FPF, Intel, X (formerly Google X), New America’s Open Technology Institute, PrecisionHawk, SIIA, Small UAV Coalition, and many media organizations. Those ‘best practices’ included:

  • Informing others of your use of drones (i.e., where reasonable, providing prior notice to individuals of the general timeframe and area where you may anticipate using a drone to collect identifiable data);
  • Showing care when operating drones or collecting and storing personally identifiable data (i.e., retaining only information that you must retain and de-identify information when possible);
  • Limiting the use and sharing of identifiable data;
  • Securing identifiable data; and,
  • Monitoring and complying with evolving federal, state and local drone laws and regulations.

This is a great place to start. This list brings us back to the basics of privacy. Whether its collection of information from consumers or employees or data gathered through a drone, it all comes down to transparency. However, these are only best practices -not laws or regulations. So is there any accountability? We’re working on it; the industry, the FAA, local and state lawmakers. Right now, we have to look to a smorgasbord of privacy and aviation laws and apply them to drone flights and data collection.

From a federal perspective, the FAA Part 107 rules do not allow for flights over people unless the pilot obtains a special waiver. In New York City for example, you’ll be hard pressed to find a street that isn’t densely swarmed with people. Further, most of New York City is controlled Class B airspace because of the airports. Again, to fly in these areas, the pilot would need FAA authorization. This is not to say that the FAA won’t issue a waiver or provide the authorization.

But, the FAA has now proposed a rule for flights over people. The rule will allow drone flights over people if the drone falls within one of three new categories, which are based on injury-risk factors. Drones in the highest-risk category will be prohibited from hovering over open-air assemblies of people unless they are in a closed or restricted-access area, like a stadium, and have been notified of the drone operation. Further, any drone that will fly over people must bear a label identifying its category, except those in the lowest-risk category (i.e., drones weighing .55 pounds or less). Manufacturers of drones weighing more than .55 pounds who want them to qualify for flights over people must certify that the drones meet specified impact-force thresholds and will not contain exposed propellers or rotating parts that will cut human skin. They also must provide pilot instructions, allow FAA inspections, have procedures to notify the FAA and the public of safety defects, and keep records related to the drones. NOTE: nowhere in this proposed rule is privacy addressed. Again, the industry and stakeholders must weigh in and create a standard if the law lags behind.

However, recently, the FAA also proposed a rule on remote identification of sUAS.  The rule would facilitate the collection and storage of certain data such as identity, location, and altitude regarding an unmanned aircraft and its control station. The comment period for FAA’s published the notice of proposed rulemaking on remote identification closed on March 2, 2020. The FAA is now targeting 2021 as the launch of its remote ID program. It would permit police officers, aviation authorities and other public officials to search for a drone by a broadcast unique identifier and find out who the operator is. Will this make the public more at ease? If a drone is hovering, with no markings, and you call your local police department, presumably they’d be able to identity the individual operator and take action. We’ll see what the future holds.

While the future of drones and privacy is unclear and still evolving, one thing is certain, to ensure that drone technology benefits society as a whole, any frameworks proposed should include an eye towards privacy.

Guidance on Using Drones for Real Estate and Construction in Dense Cities: Getting Close – But Not Too Close (Part I)

Virginia Trunkes | Construction Law Zone

The commercial use of drones, or small unmanned aerial systems (sUAS), for urban real estate and construction may finally be gaining traction. This month, the New York City Council passed a bill requiring the Department of Buildings (DOB) to study the feasibility of using sUAS to inspect building facades.

Compliance with the city’s Facade Inspection and Safety Program, which requires owners of buildings higher than six stories to conduct facade inspections and make the needed repairs every five years, can be expensive and cumbersome. As opposed to manual examinations, sUAS can get close to building facades and “hard-to-reach” locations faster and more adeptly, and deliver high-quality pictures to the remote pilot. The pilot in turn can simultaneously transmit the images to back-office engineers who can convert the aerial images into 3-D models, and therefore gauge the solidity of structures.

Yet, a 1948 Local Law prohibits any and all sUAS usage within New York City’s borders. Administrative Code § 10-126(c), entitled, “Take offs and landings,” provides: “It shall be unlawful for any person avigating an aircraft to take off or land, except in an emergency, at any place within the limits of the city other than places of landing designated by the department of transportation or the port of New York authority.”

As the 2020 bill’s sponsoring Council Member, Paul Vallone, commented: “An outdated local law, drafted decades before the advent of … ‘drones,’ is leaving New York City on the ground while other cities are already using rapidly advancing technologies to support business and improve safety.” Effective September 16, 2020, the bill takes effect immediately and the study must be completed no later than Oct. 31, 2021.

The DOB’s mandated study comes upon the expiration of the UAS Integration Pilot Program (IPP). Established by an October 25, 2017 Presidential Memorandum, the IPP is a consortium of state, local, and tribal governments, along with private sector stakeholders and experts, charged with “advanc[ing] the UAS industry”  by using “the information and experience yielded by the [IPP] to inform the development of regulations, initiatives, and plans to enable safer and more complex UAS operations … .” In other words, the IPP is to determine how to best integrate sUAS into the national airspace.  The IPP’s challenge is to evaluate and balance sUAS operations with local and national interests, including ever-increasing privacy concerns. The program is set to expire by its own terms on October 25, and recently, the FAA declined to extend it. That means, according to the Presidential Memorandum, that within 90 days thereafter, the FAA “shall submit a final report to the President setting forth the Secretary’s findings and conclusions concerning the Program.”

While the United States waits, the European Union Aviation Safety Agency (EASA) has already assessed how to integrate sUAS into aircraft space. Earlier this year, EASA published a proposed regulatory framework along with its explanatory “Opinion” for “creat[ing] and harmoni[zing] the necessary conditions for manned and unmanned aircraft to operate safely in the U-space airspace, to prevent collisions between aircraft and to mitigate the air and ground risks.” “U-space” is Europe’s unmanned air traffic management framework. The initial scope of the proposed regulations involves low level airspace, densely-populated urban airspace and locations close to airports.

EASA is the first administrative agency in the world to formally examine what is needed to ensure safety and privacy, and limit an environmental impact, in an urban environment while establishing a competitive market in “U-space services”. EASA recommends using a common information service that will enable the exchange of essential information among the U-space service providers, the UAS operators, the air navigation service providers and all other participants in the U-space airspace. According to EASA, “[o]nly a clear EU regulatory framework can establish a competitive European U-space services market to attract the necessary business investments in both the UAS and U-space services markets.” EASA anticipates that the European Commission will use its draft regulation in order to prepare a European Union regulation following its consultation with the necessary stakeholders.

Using one, large information service that will facilitate the transfer of aircraft information inherently raises privacy questions. So too does future use of sUAS traversing around city buildings. It remains to be seen whether the IPP and European Commission will evaluate privacy concerns similarly – and which if any of the two constituencies will delay enactment of legislation because of those concerns.

Virtual Claims Handling Quickly Delivers Accurate Results

Susan Egeland and Sara Inman | Faegre Drinker biddle & Reath

Property and casualty insurers are integrating drones and other means of virtual claims handling as part of their routine property inspections. But, in litigation, virtual claims handling is unfairly getting a bad rap from plaintiffs’ attorneys who try to pass it off as solely a cost-cutting measure by insurers.

In actuality, virtual claims handling works to the benefit of both insureds and insurers because it allows an insurer to handle a claim sooner without compromising accuracy. The current COVID-19 pandemic is proving the value of virtual claim handling capabilities. Major metropolitan areas have “shelter-at-home” policies in place to minimize in-person contact. Even where such policies are not in place, cities across the country are practicing social distancing. Under such circumstances, an insured may not want an adjuster to come to their property to handle a claim. But, an insurer that utilizes virtual claims handling can send a drone to a property, control it remotely and capture images of damages for an adjuster to review without any in-person contact.

Some plaintiffs’ attorneys may argue drone images are not fully capable of capturing damages present on a property. However, the accuracy of such images has already been established. A virtual imagery system known as Eagleview has long been the industry standard for measuring properties by both contractors and insurers. Eagleview takes aerial, high-resolution images of properties that are so comprehensive they can be used to measure the pitch of a roof and determine the exact number of squares on a roof.

Similarly, aerial images taken by Google are detailed enough to reflect the history of repairs to a property and the general condition of a property. Through such images, one can determine whether a roof has been replaced in subsequent years, the number of metal appurtenances on the roof, whether any appurtenances have been changed and whether any new construction has been completed at the property.

Now consider that, in virtual claims handling, the images are taken in much closer proximity than aerial images. The details of any existing damages are easy to see. The skepticism regarding virtual property inspections is simply unwarranted. Virtual claims handling is the claims handling of the future, and insureds are fortunate if their insurer is one of the carriers leading the transition. This has become even more apparent under recent circumstances such as the COVID-19 pandemic.