All standard liability insurance policies Commercial or Personal, have an absolute exclusion for aircraft; a “drone” (UAV) has been defined as aircraft. There is a distinction between “hobbyist” activities and all other uses which basically fall in the “commercial use” category. There are specific insurance products that provide acceptable liability and property (hull) coverage for both uses. There are association programs for the noncommercial hobbyist, (RC Model Aircraft Assoc.). There are Owned and Non-Owned Aircraft Policy’s that are designed for UAV’s that are not hobbyist, but rather for “commercial” use. Know that “commercial operation” does not necessarily require being “paid,” to operate the UAV. You as the Festival or Venue owner, operating your “owned” UAV over the festival grounds, to say check parking lot capacity, is a commercial use and not covered under the standard ISO Commercial General Liability Policy. Liability from a UAV operated by one of your patrons, may be addressed with a Non-Owned UAV policy.
The FAA regulations currently require that all UAV’s purchased, regardless of use, must be registered with the FAA. The FAA has a variety of regulations that regulate the use of aircraft and airspace. Regardless of type of use (commercial or noncommercial), those regulations apply. Currently, to legally operate a commercial use UAV, a Form 333 Exemption must be on file and approved by the FAA. The UAV must be operated by a licensed pilot, pilot logs must kept, and all FAA regulations and airspace regulations must be followed. A note on FAA airspace, a pilot may not operate an “aircraft” in controlled airspace under 1000 feet unless in the process of takeoff or landing. In layman’s terms, operating low over a crowd/people is a direct FAA violation, unless an altitude exemption is secured. This usually occurs at “air shows;” this is a very formal process and rarely approved.
Probable Festival UAV exposures:
· A venue operator flying “his” UAV over the gates of the festival to check for crowd dynamics is a “Commercial” operation. This is a FAA airspace violation and a FAR violation, unless an exemption is in hand.
· A hired Contractor flying over festival to take video for the Venue is commercial use; authorized flight only with a Form 333 on file and a FAA exemption for lower flight operations, if less than 1000 feet.
· Hobbyist who straps a GoPro to his UAV and takes an aerial video of “festival crowds” to sell/pass on to news stations or venue is commercial use.
· Ticketed festival patron, waiting for gates, pulls his UAV out of his trunk and passes “the wait” for gates, by buzzing the crowd. The Promoter/Venue could be liable for those actions. The Non-Owned UAV policy is applicable here.
Keep in mind that an intentional violation of a Federal Air Regulation (FAR) could impair insurance coverage and can incur fines. $1.6 Mill in fines proposed for aerial Photo company. (12/15)
Failure to register UAV results in Civil fines up to $27,000Criminal up to $250,000(Q7)
All the above boils down to the following basics for your operations: Aircraft insurance can be procured for the hull value of the UAV’s you own and the greater liability for those operations, if you are willing to meet the FAA regulations. If you choose to engage a UAV Contractor, the operational exposure needs to be effectively transferred to that Contractor “contractually,” and the Contractor needs to have viable insurance coverage for that use. The “contractual transfer” must be associated with viable insurance or the contractual transfer is an empty “guarantee” to you.
For the venue operator and or the Festival Promoter, we suggest viewing the use of “Drones” in the same manner as evaluating a pyrotechnic vendor for operations. We use this example because ultimately the “Venue owner/Festival Promoter” can be held responsible for the activities occurring on their property. In any event, there is a need to verify that a “reasonable man” evaluation was utilized. This caution relates to the actions of the Contractor and the actions of the Patron. (Note, over 1,000,000 UAV’s were sold last Christmas!)
Unaware and unprepared, is a recipe for financial disaster. Contact your Ascend Service Team for answers and solutions to this risk.