Five Steps to Take Before Using Drones at a Construction Site

Joshua Lorenz, Meyer Unkovic & Scott

There’s a buzz in the air at construction sites around the country, and it has nothing to do with power saws.

The use of drones, or unmanned aerial vehicles, has exploded in popularity, with the Federal Aviation Administration estimating that by 2020 there will be around seven million drones sold for hobbyist or commercial use—a nearly threefold increase from 2016. Among commercial drones, the construction industry leads all sectors with 239 percent growth in industry adoption year over year, according to a global report.

As the construction industry continues to jump into the high-flying world of drones, legal questions and concerns related to these devices also are soaring to new heights. Below are some key considerations that construction industry professionals should follow to prepare and protect themselves in the “drone age” in which we already are living.

Recognize That Workers Will be Using Drones

Less than a decade ago, drones were seen by most as frivolous gadgets, if not toys. Today, their uses are expanding exponentially—from photography to front-door deliveries—and the devices themselves can be worth thousands of dollars.

On construction sites, drones’ abilities are just as varied and perhaps even more useful. They can survey sites with cameras to help to create visuals for builders and their clients, monitor a project’s progress, use lasers and other flight-assisted technology to map data, inspect completed structures, carry loads and even provide a level of security. Pretty soon, they’ll be as familiar at project sites as a hammer and nails.

The higher up someone is in a project’s hierarchy, the more responsibility they bear. For that reason, owners should anticipate before a project of any size begins that someone is going to be using a drone, whether it’s the general contractor, a specialty sub-subcontractor or someone in between.

Incorporate That Reality Into Your Contracts

Like any tool, drones won’t always be used properly. Mistakes might be made, malfunctions can occur, adjacent property could be damaged, or someone may be hurt. These outcomes are unwanted, but such is the risk with using any tool on a construction site. Accidents can and do happen, but the impacts of those events can be mitigated.

So, in the event of an accident, who is liable when a damaged party comes seeking compensation? Standard AIA contracts and most other agreements do not yet contain language to account for drones, but with their prevalence, drone use is not something that should be ignored.

An experienced construction attorney can craft language accounting for drone use, including provisions for following regulations, insurance requirements and indemnification that flow down to everyone involved in a project.

Understand the Regulations

Because drones are considered unmanned aircraft, generally they are regulated by the FAA. Some states have created laws pertaining to drones, though most are not related to commercial use.

Part 107 of the FAA regulations covers commercial and government uses for drones weighing less than 55 pounds. Among the rules:

• Pilots must always avoid manned aircraft, and drones cannot be operated in the vicinity of airports, heliports or seaplane bases, so if a project is near one of these areas, it’s a no-fly zone.

• Pilots must keep their drone in sight. If they are using a first-person view camera, another observer must keep the drone in their vision.

• The maximum allowable altitude is 400 feet above the ground. The drone can go higher if it’s within 400 feet of a structure. The maximum allowed speed is 100 miles per hour.

• Drones cannot carry hazardous material.

Perhaps most importantly, would-be drone pilots must register their devices and become certified. If an unregistered pilot is controlling a drone that damages another property or hurts a bystander, that could open the door for more serious legal action and penalties from the government.

Project owners and supervisors should be aware of all drone regulations and make explicit mention of them in any contracts before potential trouble has a chance to occur.

Recognize Insurance Issues

As drones grow in popularity, so, too, does risk and, therefore, the need for insurance. A significant problem, however, is that most general liability policies do not include coverage for drones and drone use. In fact, most contain a specific “unmanned aircraft exclusion,” which excludes coverage for bodily injury or property damage resulting from ownership, use or maintenance of aircraft such as drones.

Instead, specialized drone policies are now being offered by some of the larger insurance companies in the United States. These can guard against damage to third-parties or the drone itself, and they have liability limits that can stretch into the millions of dollars.

Contractors and subcontractors using drones need to be protected with policies commensurate with the risks they are undertaking by using drones, and owners should make such insurance requirements clear in their contracts. A lack of adequate insurance coverage could leave others exposed if the drone owner or operator isn’t able to cover the damages resulting from a costly accident.

Make Sure There Is Appropriate Indemnification

Let’s imagine a scenario in which an employee of a specialty subcontractor is using a drone to inspect part of an unfinished structure, a five-story commercial building next to an occupied apartment complex. The drone operator accidentally drops the controls, and the hefty aircraft veers into a window in the neighboring building, destroying a resident’s expensive television and heirlooms in a curio cabinet.

The resident is angry and wants someone to pay, be it the drone operator, the contractor, the project owner—somebody ... anybody. Oftentimes, those with deep pockets are targeted with claims and legal action regardless of their direct involvement. In our example, the owner and contractor likely would be brought into the dispute even though it was the actions of a specialty subcontractor that caused the damage. Having well-crafted indemnification language in your contracts and subcontracts shifts this risk down to the person or entity who actually caused the harm. When combined with language requiring adequate insurance coverage naming the owner and contractor as additional insureds, the owner and contractor should be well protected.

Without proper contractual language, the project owner or contractor may be left holding the bag after everything is said and done. Not so, however, if the contract and subcontract have appropriate indemnification and insurance provisions guarding against claims made upon the owner and/or general contractor. Project agreements should include language protecting all non-involved parties from legal responsibility in the event of a costly accident.

Get Ready to Fly

Drones will only become more useful on construction sites. Their bird’s-eye perspective, quick movement, capacity to carry and ability to be augmented will lead to more iterations and specialized uses of which we can’t yet conceive. Those in construction who embrace this technology will have a leg up on their competition and likely will be more attractive to developers who recognize the advantages of drones.

It makes for an exciting time for everyone in the industry, but it’s wise to understand and account for the risks associated with using drones. That means project owners, contractors and subcontractors all must educate themselves on the applicable regulations and guard themselves with adequate insurance coverage. Most of all, it’s pivotal that contracts and subcontracts are drafted with specific language regarding drone use and provisions for indemnity in case the risk turns real.

Despite being a relatively new area, construction law attorneys can help project owners, contractors and subcontractors alike appropriately manage the risks associated with drone use, thus allowing everyone to take to the sky with confidence.

Joshua Lorenz is an attorney at Pittsburgh-based law firm Meyer, Unkovic & Scott. He focuses his practice on construction law and litigation. He can be reached at jrl@muslaw.com.