In its quest to figure out the safest way to approach the growing use of unmanned aerial vehicles, or drones, the Federal Aviation Administration (FAA) recently announced an initiative with several companies called the “Pathfinder Project.”
The partnerships–with CNN, PrecisionHawk and Berkshire Hathaway’s BNSF Railroad–will focus on the following areas, said the FAA: line of sight operations in urban areas, flight outside the pilot’s direct vision in rural areas, and operations outside visual line-of-sight in rural, isolated areas.
“Government has some of the best and brightest minds in aviation, but we can’t operate in a vacuum,” said US Transportation Secretary Anthony Foxx, in a statement.
In announcing the program at the Association for Unmanned Vehicle Systems International Unmanned Systems 2015 conference in Atlanta on May 6, FAA Administrator Michael Huerta said the drone industry is “changing faster than any segment of the aviation industry.”
“We anticipate receiving valuable data from each of these trials that could result in FAA-approved operations in the next few years,” he said in a speech at the conference. “They will also give insight into how unmanned aircraft can be used to transform the way certain industries do business–whether that means making sure trains run on time, checking on the health of crops, or reporting on a natural disaster.”
CNN will provide feedback on the use of UAVs for newsgathering in urban zones, PrecisionHawk will using them to survey crops and BNSF Railroad plans to use drones to inspect rail infrastructure, said Huerta.
“Integrating unmanned aircraft into our airspace is a big job, and its one the FAA is determined to get right,” Huerta said.
Some insurers have also received approvals from the FAA to test the use of UAVs in claims handling. Last month AIG and USAA saidthey each got exemptions from some FAA regulation regarding drones. State Farm and Erie Insurance Group as have waivers from the FAA.
As it looks at different ways it can use UAVs, the insurance industry for the most part has struggled with underwriting the risk.
According to a briefing from insurance rating agency AM Best Co., commercial coverage is typically provided by aviation insurers. Policy limits provide $1 million to $2 million of personal liability coverage and less than $500,000 on hull, according to AM Best. Premiums are not tracked separately so it is hard to determine the market, but :it is anticipated that whatever the amount, future premium could be multiples of this once the FAA laws are passed and more waivers are granted,” said AM Best.
The agency reports that Zurich Insurance is offering a drone package policy developed in conjunction with Global Aerospace Underwriting Managers–an aviation risk pool with Munich Re, National Indemnity and Tokio Marine as the top three participants.
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Chad Hemenway is Managing Editor of Advisen News. He has more than 15 years of journalist experience at a variety of online, daily, and weekly publications. He has covered P&C insurance news since 2007, and he has experience writing about all P&C lines as well as regulation and litigation. Chad won a Jesse H. Neal Award for Best Single Article in 2014 for his coverage of the insurance implications of traumatic brain injuries and Best News Coverage in 2013 for coverage of Superstorm Sandy. Contact Chad at 212.897.4824 or [email protected].
