All posts in Risk

Unmanned Aerial Systems Regulations


        Unmanned Aerial Systems

dronetop

Unfortunately for businesses, the clearest UAS regulation applies to non-commercial use. Hobbyists with small craft may operate drones, but they must maintain a visual line of sight (VLOS), stay below 400 feet and remain at least 5 miles from airports.

The Federal Aviation Administration (FAA) has proposed rules which would regulate size, restrict flight paths, clarify registration and marking, and outline training for drone operators. At the moment, the FAA plans to restrict UAS operation to VLOS flight during daylight hours, though that may change as technology advances.

The Small UAS Rule has yet to take effect, and its exact provisions are likely to be revised. However, the FAA is exercising its authority under Section 333 of the FAA Modernization and Reform Act of 2012 (FMRA). Under this rule, the FAA can grant case-by-case authorization for the commercial operation of certain UAS prior to the finalization of the proposed Small UAS Rule.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Physical Loss: Beyond the Drone


        Unmanned Aerial Systems

dronetop

Businesses will want to consider their potential physical losses carefully. With UAS, it’s often the loss of the payload—not the aircraft itself—that can be the most costly.

One of the most widespread applications to date has been in unmanned aerial photography. Businesses in real estate, agriculture and insurance all have interests in surveying and photographing land, and the cameras used to do so can get expensive. Filmmakers, who have also been pioneering commercial drone use, often employ even more expensive cameras.

Because of the increasing affordability of drones, the payload often has a higher intrinsic value than the aircraft itself. Additionally, cameras and other payloads are usually slung below the aircraft, meaning that in the event of a hard or emergency landing, damage to the payload is almost certain.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Planning for Obsolescence; Unmanned Aerial Systems


        Unmanned Aerial Systems

dronetop

Technology itself could prove especially costly in the event of a UAS loss. The manufacture of UAS is neither regulated nor standardized, which means there are a number of manufacturers in the market, each adhering to different standards. Many haven’t diversified, and should some technological advancement prove too costly for certain smaller companies to adopt, they could potentially go out of business.

Bankrupt or defunct manufacturers, coupled with a lack of industry standards for design, could mean that the loss of a relatively inexpensive motor today would instead be a total financial loss on the aircraft five years from now, when replacement parts are completely unavailable.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Unmanned Aerial Systems Casualty and Liability


        Unmanned Aerial Systems

dronetop

As with conventional aircraft, a UAS crash could mean a hefty casualty claim. While the crash rate is actually relatively low with conventional aircraft, UAS are not subject to the tight maintenance requirements or the stringent operator regulations that make conventional commercial aircraft crashes so rare.

Eventually, mechanical failures and operator errors will likely result in crashes. Businesses, especially those that operate UAS in populated areas, should make sure they are adequately covered in the event of property damage or injury to a third party.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Unmanned Aerial Systems Theft and Fraud


        Unmanned Aerial Systems

dronetop

A couple of benefits of UAS—their portability and advanced technology—can also prove to be great liabilities. Small UAS make easy and attractive targets to thieves, and the industry hasn’t developed many internal safeguards against stolen drones. Unlike the traditional aircraft industry, which has a tracking system and serial numbers for aircraft parts, the UAS industry hasn’t adopted either a tagging or tracking system. In other words, there’s almost no chance of recovering a stolen UAS.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Unmanned Aerial Systems and Opportunities and Exposures


        Unmanned Aerial Systems

dronetop

A benefit that could become a potential liability is the flexibility of the technology—that is, a drone’s potential as a broad-use aircraft. In theory, the same UAS that photographs a parcel of land for a realtor on one day could be used to survey a hazardous chemical spill the following day.

This kind of flexibility offers a broad number of business opportunities, but each new opportunity brings with it attendant exposures that compound upon one another. Businesses will have to think through how they plan on using their UAS in order to make sure that their FAA authorization, and their insurance, covers each arena of commercial use.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Unmanned Aerial Systems: Who Watches the Watchers?


        Unmanned Aerial Systems

dronetop

Privacy represents one of the largest exposures with regard to drones. A highly maneuverable technology that gives remotely operated cameras virtually unfettered access to any location is bound to result in claims of privacy breach. What’s unclear, however, is how both the legal system and insurers plan to address these new exposures.

Currently, carriers exclude all privacy-related claims, but the increased exposure means that there’s a potential market for such protection. However, without some kind of precedent, it’s uncertain how, if at all, the insurance industry will respond.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

Unmanned Aerial Systems Cyber Liabilities


        Unmanned Aerial Systems

dronetop

Perhaps the greatest potential liability regarding unmanned aerial systems comes from the cyber risks posed by UAS. The greatest fear is that a hacker might hijack a drone and fly it into a commercial airliner or some other populated location, resulting in massive property damage and loss of life.

However, while that scenario is possible, other scenarios are more likely avenues of loss. Customer data—names, addresses, credit card numbers, images, videos, etc.—is a far more enticing target for hackers, and one that an enterprising thief with a little skill and a wireless transmitter might be able to access from a drone flying overhead.

While the military and hobbyists have been using unmanned aerial systems (UAS), better known as drones, for some time, businesses are just starting to adapt the technology for their own uses. UAS are creating new opportunities—and new risks—for businesses to evaluate, and regulators and insurance carriers are scrambling to keep pace.

dronebottom

HACCP Programs the Importance of Training


        Implementing an HACCP Program

RetailTop

Training and education are critical for successful HACCP implementation, providing the HACCP teams, managers, operators and food handlers with the additional technical skills required to implement HACCP. A survey revealed that the use of HACCP and proper implementation of the seven principles was significantly higher in businesses with qualified and trained managers than in businesses without any formally trained managers. Training should emphasize the following objectives:

     • An understanding of the practical implications of HACCP to food safety

     • Practical expertise and knowledge for HACCP application

     • Motivation for further development and management of HACCP

Training focused on HACCP principles and applications should include professionally prepared information presented in a clear, authoritative way by an individual already experienced in HACCP application. This could be someone employed at or an external consultant.

Hazard analysis critical control point (HACCP) is a systematic preventive approach to food safety and pharmaceutical safety that addresses physical, chemical and biological hazards as a means of prevention rather than finished product inspection. It is used to identify potential food safety hazards so that action can be taken to reduce the risk of illness and, consequently, reduce the risk of product recalls or serious legal claims. The Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) have mandatory HACCP programs for juice, meat and seafood producers, but the HACCP principles can be applied successfully in any segment of the manufacturing industry.

RetailBottom

HACCP Content of Training


        Implementing an HACCP Program

RetailTop

The content of training depends on the unique characteristics of your facility. However, the curricula might include the following elements:

     • Biological, chemical and physical hazards

     • Applicability of Current Good Manufacturing Practices
     and Sanitation Standard Operating Procedures

     • The five preliminary steps of HACCP with application to the
     specific manufacturing segment

     • The seven principles of HACCP and how they apply to the industry

     • The applicable HACCP regulation and related guidance documents

Hazard analysis critical control point (HACCP) is a systematic preventive approach to food safety and pharmaceutical safety that addresses physical, chemical and biological hazards as a means of prevention rather than finished product inspection. It is used to identify potential food safety hazards so that action can be taken to reduce the risk of illness and, consequently, reduce the risk of product recalls or serious legal claims. The Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) have mandatory HACCP programs for juice, meat and seafood producers, but the HACCP principles can be applied successfully in any segment of the manufacturing industry.

RetailBottom