Back in March, our Data Privacy + Security Insider blog reported an increase in the use of commercial drones by State Departments of Transportation across the country. Now, insurance companies are also getting in the game. Using drones for underwriting, determining property values and conditions for policy issuance, inspections and risk evaluations may be more economical, may provide for better response times for inspections of insureds’ properties during a catastrophe, and may increase the safety of insurer employees.

So what does this mean for insurance companies? Well, certain provisions of the Federal Aviation Administration (FAA) Modernization Act may be implicated. Insurers may also consider Section 333 exemption and certificate. Section 333 of the FAA Modernization Act allows the FAA, on a case-by-case, the ability to grant entities the authorization to use certain unmanned aircrafts (i.e. drones) to perform commercial operations prior to the finalization of the Small UAS Rule. To date, the FAA has granted approximately 5,200 exemptions. All of this applies until a final rule for small drone operations is adopted. Right now, the proposed rule is still sitting in limbo – the comment period closed back in April 2015. Insurance companies may need to consider whether the employees who will operate the drones (presumably insurance adjusters) may need to get an airman certificate from the FAA.

Some state, county and municipal legislatures have passed (or have proposed) ordinances regulating the use of unmanned aircraft systems. Syracuse University’s Institute for National Security and Terrorism has a website that reportedly tracks the status of such legislation throughout the nation. Insurers considering the use of drones may need to keep in mind that local rules regarding the use of drones may vary from the federal regulations, and consider whether the federal law preempts state and local regulations. An interesting question also arises with respect to insurers operating under the National Flood Insurance Program, and whether those insurers would be subject to state and local regulations.

Drone operations may become a more feasible alternative for insurance companies during major catastrophes, and all businesses for that matter; the FAA says that the new rules will be in place soon (supposedly this summer) and the restrictions on commercial drone use may be alleviated a bit.

This post is also being shared on our Data Privacy + Security Insider blog. If you’re interested in getting updates on developments affecting data privacy and security, we invite you to subscribe to the blog.

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Photo of Kathryn Rattigan Kathryn Rattigan

Kathryn Rattigan is a member of the Business Litigation Group and the Data Privacy and Security Team. She concentrates her practice on privacy and security compliance under both state and federal regulations and advising clients on website and mobile app privacy and…

Kathryn Rattigan is a member of the Business Litigation Group and the Data Privacy and Security Team. She concentrates her practice on privacy and security compliance under both state and federal regulations and advising clients on website and mobile app privacy and security compliance. Kathryn helps clients review, revise and implement necessary policies and procedures under the Health Insurance Portability and Accountability Act (HIPAA). She also provides clients with the information needed to effectively and efficiently handle potential and confirmed data breaches while providing insight into federal regulations and requirements for notification and an assessment under state breach notification laws. Prior to joining the firm, Kathryn was an associate at Nixon Peabody. She earned her J.D., cum laude, from Roger Williams University School of Law and her B.A., magna cum laude, from Stonehill College. She is admitted to practice law in Massachusetts and Rhode Island. Read her full rc.com bio here.

Photo of Deborah Vennos Deborah Vennos

Deb Vennos is a trial lawyer and a member of the Insurance + Reinsurance Group. Her extensive scientific experience (explained below) and experience in insurance coverage litigation provides a unique background for representation of insurers in complex insurance coverage and bad faith litigation…

Deb Vennos is a trial lawyer and a member of the Insurance + Reinsurance Group. Her extensive scientific experience (explained below) and experience in insurance coverage litigation provides a unique background for representation of insurers in complex insurance coverage and bad faith litigation, which typically involve a “case within a case.” Deb has advised and defended insurers in a wide range of coverage disputes, including, most recently, the defense of a $27 million business interruption and $150 million bad faith claim arising from Hurricane Katrina, which resulted in a voluntary dismissal after five years of litigation. She has also defended numerous multimillion-dollar coverage actions relating to corrosive imported drywall, catastrophic losses to manufacturing and industrial facilities, losses involving construction defects and mold contamination, sinkholes, fire and explosion losses, landfill business losses, and design defect claims.

Deb’s parents were strong believers of education being an important means of protection in the world, thus excelling at school was expected from her and her siblings. Deb completed college at the age of 18, graduating magna cum laude with a B.S. in chemistry from Towson State University in Baltimore, Maryland. She then went on to complete her master’s degree in chemistry at the age of 20 from Cornell University in Ithaca, New York. By the age of 22, she was awarded a Ph.D. in chemistry from Cornell. Deb’s Ph.D. in chemistry provides a solid foundation for her focus on litigation matters involving scientific and engineering principles. After earning her Ph.D., she worked as a post-doctoral fellow at AT&T Bell Laboratories in Murray Hill, New Jersey where she performed research in the development of new materials for use as optical fibers.

After her post-doctoral work, Deb decided to take a break from traditionally academic interests, and became a professional paid firefighter in upstate New York. She became a certified fire and arson investigator in addition to her full time work as an on-line firefighter. After 6 ½ years of firefighting, she decided to move on and go to Cornell Law School where she received her J.D.

When she is not reading cases and writing briefs, she likes to be outdoors with her children. Deb also loves gymnastics, and enjoyed seeing all of the talented and dedicated young men and women compete at the London 2012 Olympic Games. Next up, Rio!

Read Deb’s rc.com bio.