Kelly Greco | Fox Rothschild LLP | November 5, 2016
With the rapid expansion of the drone industry, the FAA has granted more than 4,200 special permits for companies wanting to utilize drones to advance innovations in their businesses.[1] According to the Association for Unmanned Vehicle Systems International, companies representing more than 600,000 jobs and $500 billion in economic impact were among the first 1,000 exemptions granted.[2] One such innovation is already being seen and tested in the area of real property inspections. The use of drones for real property inspections is transforming industries like insurance and telecommunications.
State Farm was the first insurer in the United States to receive Federal Aviation Administration (“FAA“) permission to test Unmanned Aircraft Systems (“UAS“) for commercial use.[3] Insurance giants American International Group Inc. (“AIG“), United Services Automobile Association (“USAA“), and Allstate followed suit, each receiving approval from the FAA to use UAS to conduct property inspections in the United States.[4]Using UAS for property inspections allows State Farm, AIG, USAA, and Allstate to inspect areas that are difficult or dangerous for humans to inspect, such as wind farms, condemned buildings, damaged roofs and collapsed buildings.[5] The insurance companies hope that drone technology will allow them to utilize UAS as remote insurance inspectors, allowing them to inspect properties more safely, quickly and easily. In addition, Allstate believes that “[d]rones used in the claims process could provide faster payments to customers, especially in an area where widespread damage occurs quickly.”[6]
However, the FAA limits how State Farm, AIG, USAA, and Allstate can use UAS in their operations.[7] For example, the insurance companies can fly drones over private or controlled-access property only with the permission from the owner or other authorized party.[8] Therefore, the insurance companies need to have permission from all landowners they fly over.[9] In addition, flights must take place away from airports and most urban areas and must be during the daytime.[10] Such restrictions will certainly make it more difficult for insurance companies to use drone technology to its full potential. The restrictions, however, strike a balance between the commercial use of drones and the FAA’s concerns regarding privacy and safety.
Similarly, telecommunications firms hope to be able to utilize UAS to inspect more dangerous or difficult inspections.[11] To achieve this, Aerialtronics joined efforts with Neurala and NVIDIA to demonstrate a UAS system that can visually inspect a cell tower and recognize the equipment mounted on the mast.[12] In the near future, such a system will be able to automate the documentation of assets and assess the mechanical functionality and condition of the cell tower to identify rust and other defects.[13] In a recent blog posting, John Donovan, the chief strategy officer for AT&T, wrote about his excitement for the future of AT&T and drone technology.[14] AT&T recently launched the trial phase of its national drone program, which is currently using drones to perform aerial inspections of its cell towers.[15]
Looking forward, AT&T hopes to use Flying Cell on Wings to provide LTE coverage at large events and rapid disaster response.[16] In this way, AT&T will be able to provide coverage when cell towers are usually clogged by increased traffic.[17] The future use of drones is also expected to expand beyond the insurance and telecommunications industries. Drones will likely be used by governments and companies to safely inspect bridges, buildings, wind turbines and other infrastructure.[18]
Our UAS team at Fox will continue to monitor the use of drones in property inspections and the restrictions placed on such usage by the FAA.
[1] Bart Jansen, USA Today, Insurers adopt drones for airborne inspections, Mar. 21, 2016, available at http://www.usatoday.com/story/news/2016/03/31/insurers-adopt-drones-airborne-inspections/82434322/[hereinafter “Jansen”].
[2] Id.
[3] State Farm, State Farm Cleared for Takeoff: FAA okays insurer to test damage-assessing drones, Mar. 16, 2015, available at https://www.statefarm.com/about-us/newsroom/2015/03/16/cleared-for-takeoff.
[4] Leslie Scism & Jack Nicas, The Wall Street Journal, Insurers Get Approval to Use Drones: AIG, State Farm and USAA will be able to use the unmanned aircraft to do inspections, Apr. 8, 2015, available at http://www.wsj.com/articles/aig-receives-faa-approval-for-drone-use-1428499777 [hereinafter “Scism & Nicas”]; Cameron Graham, Technology Advice, 3 Companies Using Drones to Improve Inspections, June 23, 2015, available at http://technologyadvice.com/blog/information-technology/companies-using-drones-for-inspections/[hereinafter “Graham”].
[5] Id.
[6] Graham.
[7] Scism & Nicas.
[8] Id.
[9] Id.
[10] Id.
[11] Jansen.
[12] Drone Business.center, Intelligent Drone Will Automate Inspections, Oct. 4, 2016, available at https://dronebusiness.center/intelligent-drone-automate-inspection-12525/?utm_source=Drone+Business+Center&utm_campaign=78d7db7320-dbc_10081610_7_2016&utm_medium=email&utm_term=0_5c60558777-78d7db7320-124566457 [hereinafter “Drone Business.center”].
[13] Id.
[14] John Donovan, Drones Taking Our Network to New Heights, July 13, 2016, available athttp://about.att.com/innovationblog/drones_new_heights.
[15] Id.
[16] Id.
[17] Id.
[18] Drone Business.center.