Flight Clearance

The risks and benefits of drones

nmanned aerial vehicles, or UAVs—more commonly called drones—are an increasingly popular tool on construction projects. Drones allow contractors and owners to see the “big picture” and can assist with bid preparation, project monitoring, and documenting impacts. But those benefits also come with legal risks, which must be minimized to avoid potential pitfalls.

Drones provide potential benefits at multiple stages of a project—from pre-bid to final completion. Drones can provide detailed topographical surveys and project models, calculate site area and volume, locate utilities, and identify potential hazards. Such tools reduce costs overall and lead to more accurate cost estimations, resulting in more informed proposals.

Real-time data and imagery captured by drones supply contractors with immediate progress updates, which streamlines performance, decision-making, and planning. Drones allow contractors to monitor inventory and equipment on site, as well as remotely inspect work in hazardous areas. Thus drones increase project efficiency and reduce the number of safety-related incidents.

Drones can also assist in conflict resolution. Real-time data allows contractors to instantly identify project issues. Data and imagery may also provide support for a contractor seeking additional time and/or costs associated with performance, as owners can view, in real time, impacts arising from issues such as differing site conditions. If litigation takes place, data can offer evidentiary support for a contractor’s legal position.

However, legal risks can accompany drone use as well. Contractors must comply with federal drone regulations. Specifically, 14 CFR (Code of Federal Regulations) Part 107 governs small, unmanned aircraft systems, which includes drone operation on construction projects. The regulations include licensing obligations for an operator, as well as airspace restraints that operators must follow. State and local governments may require additional licenses and permits for drone utilization.

Drone malfunctions or collisions also pose a risk. Such accidents may cause injury to property and/or personnel on site, giving rise to contractor liability. Further, drone performance limitations can vary. A drone’s short battery life means they need frequent charging and may cause pauses in work that is dependent on drone data collection. Drone performance also depends on fair weather. Adverse conditions may impact data collection or transmission and cause project delays.

Notably, drones capture all imagery in an area, not just project-specific data. In heavily populated areas, drones may capture images from non-consenting third-parties, which could violate privacy laws. Operations can also give rise to trespass concerns, particularly if a drone travels over third-party property without permission.

Data that is transmitted via drone use can also pose particular threats to cybersecurity. Unsecured transmission of project data to shared networks—including drone footage—can result in a breach of confidentiality, particularly if the government deems videos of the project site to be controlled, unclassified information. As such, it is imperative that contractors limit on-site drone operations to authorized users who are acting in accordance with applicable laws and contract requirements.

Contractors who use drones should consider adoption of an internal management program that addresses drone utilization. An effective policy establishes inspection timelines, an incident reporting system, safety protocols, and instruction on the storage, retention, and access to data obtained via drone. The policy should also establish cybersecurity protections for stored data, along with employee training focused on identifying, preventing, and responding to network breaches. Policies should also address drone use by subcontractors.

Contractors can negotiate contract clauses to address drone use during performance, ensuring both parties agree on the limitations of liability and indemnity connected with drone operations. Contracts should further outline responsibilities for drone management, data retention, cybersecurity, and intellectual property rights.

Insurance coverage specific to drone operations can also reduce liability. A comprehensive policy should address potential property damage and injury to on-site personnel and to third parties. A standard commercial general liability policy may be insufficient, leaving a contractor vulnerable to coverage gaps.

Contractors must also stay abreast of applicable laws. Failure to follow drone laws could result in financial penalties to the contractor, loss of an operator’s license, and could jeopardize project progress.

The use of drones can enhance a contractor’s performance throughout the life cycle of construction projects. Although outweighed by the benefits, drone operation introduces particularized risks that contractors must consider. By proactively addressing those risks, contractors can successfully navigate the legal landscape of drone use while taking advantage of technological advancements within the industry.