The Drones Have It – Flying Your Way into Workers’ Compensation

As risk management evolves with technology, one of the new ways to reduce risk and injury is through drone use. This session at the 2020 CLM Workers’ Compensation and Retail, Restaurant and Hospitality Conference explored how drones are affecting scene investigation, accident reconstruction, surveillance, monitoring disabilities, claims settlements and exposure reduction.

Speakers included:

• Alicia DePalma, Claims Coordinator, Lockton Companies, LLC
• Cindi Hodges, Claims Manager, Southern States Insurance Exchange
• Wendy Smith, Attorney, Morgan & Akins, PLLC
• Joseph Teitelman, Forensic Engineer, ARCCA, Inc.

Unmanned aerial vehicles (UAVs), otherwise known as drones, have been used to prevent catastrophic injuries, reduce risk of exposure to hazardous substances, and as a tool to more safety check remote sites. They have become a helpful instrument to reduce the cost of claims and, with recent changes in the FAA regulations, insurers’ use of drones has increased.

Drones in Risk Management

People typically think of using drones for surveillance, however, that is a limited view as to how drones can be used. Not only are they small and inexpensive to use, but they can also maneuver in places that are unsafe for humans and can cover a large area in a small amount of time. They can also be monitored remotely.

These features make drones extremely useful in the workers’ compensation setting. For instance, drones can be used for:

• Roof inspections – Drone cameras can provide detailed images, including areas on roofs and other structures that are not easily accessible for humans.
• Fires – Drones can be used to inspect how dangerous a particular situation is before you send in fire fighters and other emergency crews.
• Inspecting damaged structures – Drones can be used to evaluate structures deemed unsafe such as warehouses, commercial boilers and factories that manufacture dangerous chemicals.
• Fraud monitoring – Drones can monitor inappropriate activity or property damage.

Not only can drones help prevent one-the-job injuries, but they can also lower the cost related to dangerous assessment such as roof inspections or evaluating weather damage. They can also be used in place of activity that typically involves ladders, reducing costly falls.

For insurers, drones can eliminate costs by reducing the amount of people that would otherwise need present at a disaster site. Remote access also means that people can review the data in real time and process claims faster. Finally, drones can be used for site mapping and reconstruction of scenes, providing more reliable information than a witness statement, which can be crucial to defense of severe or catastrophic workers’ compensation claims.

On the other hand, there are some disadvantages to drone use. There are regulations that must be followed, which has limited the capacity of use. The cost of using drones can be a drawback for small businesses. There are also safety concerns and possible lawsuits that can arise. That being said, the advantages far outweigh the disadvantages. As technology advances, safety features and cost continue to improve.

Developing Protocol for Drone Use

One of the largest concerns while flying drones next to structures or public places is the potential hazards they can create if they strike something or someone in an uncontrolled manner. The FAA has rules to combat this risk, stating that drones cannot be operated above people or vehicles that are not directly participating in the operation. In addition to following that guideline, other safe practices include:

• Keeping the drone within a visual line of sight.
• Utilizing assistance of a dedicated visual observer.
• Operating at or below an altitude of 400 feet above ground level.
• Conducting pre-flight inspections of all equipment.

In addition to the expense of purchasing a drone, employers must consider the cost to train current employees or possibly recruit new talent as a drone operator. Those using the drone must be trained to operate it safety, but also to inspect and maintain it properly.

Insurers also must be trained on how to handle the data collected for managing and litigating claims. As privacy laws get more stringent, there are challenges related to how data can be collected and stored. It is important to keep up with the use of drones in each jurisdiction and the various legal regulations.