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When construction workers head to a job site, they are increasingly encircled by technology.
The use of drones and wearable technology on building projects is expanding, insurance experts say, as construction companies use the devices to make the work safer, faster and more accurate.
“Drones are going like gangbusters,” said James Boileau, construction segment director with Zurich North America in Edina, Minnesota. Additionally, he said, wearables are beginning to take hold as safety devices on construction sites.
“I’d say we’re looking at less than 1% use of wearables,” but last year more people became aware of the technology and “people are talking about it,” he said.
Mr. Boileau said there is wearable technology that can track a worker’s body temperature and heart beat or determine if a worker has fallen. In the event of an evacuation, he said, wearables can help determine if all the workers have escaped safely and they can also “make sure people aren’t where they shouldn’t be.” David Merker, senior vice president and aerospace Northeast manager for the Americas with Willis Towers Watson P.L.C. in New York, said “the construction industry without a doubt is leading the pack” in the use of drones.
“It’s forcing everyone to think differently because of the data that’s available, the type of operations and how readily available all this is for people to use instantly.” In response to the growth of drone use, the Federal Aviation Administration released rules for routine commercial use of small unmanned aircraft systems, which became effective Aug. 29. Among other things, the rules require drones to weigh less than 55 pounds, including the payload, and cannot exceed 100 miles per hour. Drone pilots must complete an aeronautics test and pass a background check.
“You’re going to see a lot more companies jump into this,” said John Babel, assistant vice president, senior risk engineering consultant with XL Group Ltd. in Denver, which does business as XL Catlin, “because companies in the past who have used a helicopter to gather information or data now will be able to do that at at least half the price and in less than a quarter of the time.”
Mr. Babel said companies that use drones frequently may want to consider getting aviation insurance.
Companies with existing aviation coverage may also want to expand their existing aviation cover to include drones, he said.
Premiums will vary based on the drone types, payloads, use and operator experience, Mr. Babel said in a recent white paper, adding that insurance coverage of $1 million in liability for a small commercial drone can run $1,500 or less.
For companies that use drones in-house where it is not part of the core business, Mr. Babel said an endorsement can be attached to commercial general liability policies to override the aviation exclusion.
“This is going to be a very interesting time in the next year or two,” Mr. Merker said, “because you’ve got nontraditional insurance policy buyers buying into aviation, you’re having aviation having to deal with risk they’ve never had to traditionally deal with, which is privacy and cyber, and you’ve got to blend those together. And oh, by the way, you don’t any have data on this yet.”
Dan Gmelin, national architects and engineers product head for Hiscox Ltd. in New York, said once insurers “start seeing the use of drones year after year not bringing forth a dramatic increase in claims for the industry, they’ll gain more comfort and then you’ll see more affirmative coverages for drones.”
And drones can improve safety, he said. “There are areas where it could be too dangerous or difficult for a person to go, just send a drone in to do the video surveillance or take photographs. Or if a person does have to go in, you can send a drone in to do reconnaissance and it can come back and show that person what they’re getting into.”
In addition to the FAA, state and local governments are passing their own drone ordinances.
“It’s a patchwork of different standards,” said Brendan Holt, an associate with the law firm Saxe Doernberger & Vita P.C., in Trumbull, Connecticut. “If your policy has language in it about getting enough coverage for anything that’s considered a violation of an ordinance or a statute or a law and your drone use was not compliant with these very regionally specific laws, you might not have coverage for that reason alone.” Both drones and wearables share a common concern in the form of privacy and cyber security issues.
“The invasion of privacy will be unique,” Mr. Merker said of drones, “and it’s unique for aviation because aviation typically has not had to deal with that issue.
You’ve now created a platform that is essentially a live sensor collecting information when and where it needs to and you’ve got to control that.”
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