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August 11, 2014

When Drones are Employees, Legal Issues can Follow

While the idea of drones in general has left some a bit cold—especially when it comes to camera-packing drones that can see in our windows while leaving actual police officers or the like potentially miles away—the idea of drones in business has opened up a wide array of new possibilities. The down side, however, is that while whole new possibilities are now available, so too are legal issues that surround the idea of drones in business.

Ever since Jeff Bezos hit “60 Minutes” and gave us a look at the idea of Amazon Prime Air, speculation began running wild about what similar businesses could do with such technology, ranging from pizza delivery in minutes to completely different kinds of restaurants adding delivery options to video stores that could bring titles in minutes, thus beating Netflix in the DVD circuit. But, the specter of legality got involved, and raised a few issues of its own.

In response to this, Fafinski Mark & Johnson—a law firm in Eden Prairie, Minn.—recently established an unmanned aircraft systems (UAS) group designed to address some of these issues. The firm's Donald Chance Mark Jr. recently addressed some of these points directly, noting that it was that very same “60 Minutes” piece that led him to the idea. The first thought on his mind: what if a package was dropped or stolen?

Originally, the FAA was set to bring in rules regarding drone aircraft for business users this September, but it seems clear that that deadline will come and go without such rules in place. Indeed, there are major issues that need addressing, like the use of drones near airports, and how such drones can be used in a fashion that accommodates both the newfound opportunities drones represent while also accommodating safety and privacy concerns. Mark relates that the “potential for disaster is large” with the use of drones, and in many ways, that's the case.

However, there does seem to be some fairly immediate points those interested in bringing drones to business can engage in for protection, according to Mark: insurance is important here, and the insurance industry from there will make its own demands. Training and the like may come into play as insurance firms offer policies according to specific circumstances, like what kind of payment will be rendered for damaged items on the ground.

Naturally, with something like this there is plenty of potential in both directions, both for opportunity and disaster. A delivery drone bringing a previously undeliverable meal to a house, for example, is a huge opportunity. But what happens if that drone loses power over, say, a crowded stretch of road, where it drops down onto the road surface and then there's a major accident? Who is liable at that point? This is why insurance will be so important for drone operators.

Having a drone on hand will be a powerful new business tool for just about anything from security to retail operations. But with the laws around such tools moving slowly at best, it may well be that private industry will take the lead on this one, with insurance firms deciding what's necessary to make writing policies on such operations cost-effective. There's too much opportunity afoot here to ignore drones, but the potential risks are just as important to bear in mind.

Edited by Maurice Nagle

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