Aviation’s New Business Frontier: Legal, Safety and Insurance Essentials for Commercial Drone Operators

By: Juan B. Plaza, AG Operational Safety Ambassador

With fast-evolving drone regulations, shifting public attitudes and new risks, commercial drone operators face more scrutiny, and opportunity, than ever. I had the privilege of moderating the “Everything You Need to Know Before You Fly” panel, at the Commercial UAV Expo. The three experts we brought to the packed Summit Stage offered a roadmap to master the industry’s critical legal, safety and insurance challenges. We divided the one-hour session into four presentations, each led by a top practitioner. I opened as an industry consultant and pilot offering the “view from the cockpit.” Risk management specialist Josh Olds, drone law author and attorney Tyler Hazen and insurance expert Alistair Blundy rounded out the panel. As a team, we tackled the regulatory maze, safety management and the financial realities of drone incidents.

Drone operators today contend with a patchwork of federal, state and local regulations. I opened the session by establishing the stakes, now that the Federal Aviation Administration (FAA) has published the much-anticipated part 108 NPRM and the regulatory environment for pilots is bound to change dramatically. In my opinion, the coming Part 108 rules represent a seismic shift from the familiar territory of Part 107, notably changing deliverables for pilots and corporations alike.

I stressed the fact that commercial operators need comprehensive liability coverage and robust safety documentation, since future rules will shift responsibility from the pilot to the corporation. As such, the role of the pilot in Part 107 is very different from the world of the pilot in Part 10. Responsibility will be switching from the pilot in command to the corporation that employs that pilot. This shift means corporations must adopt rigorous policies and training. They must move beyond merely having an individual Part 107 certificate to most probably a full fledged Safety Management System (SMS).

Tyler Hazen, drone law author and attorney at Angulo McGhee APC, pushed the conversation into the legal gray zones that remain unaddressed by federal law. He described the influence and unpredictability of state intervention. “We have seen in the past, people respond to public comments,” he noted, urging operators to weigh in on new regulation drafts, “For example, that the Uniform Law Commission’s proposed ‘Uniform Tort Law Relating to Drones Act’ was quickly scuttled due to industry backlash against presuming any sub-200-foot overflight a trespass.”

Tyler then elaborated, “States have what’s called a police power to regulate things like privacy and property. And that’s very important when we’re talking about operations at scale.” From Michigan and Indiana’s presumption of trespass at low altitudes to Ohio’s hands-off approach, seeing drones and helicopters as functionally similar, local rules create a shifting landscape for operators to navigate.

Even infrastructure and zoning laws continue to evolve. “Florida saw that states may want to prevent a drone port from coming into their city,” Hazen explained. “The state of Florida said, no, you cannot discriminate against a drone port in your zoning laws. So this is something cool…they’re the first and only state to have done this.” Hazen’s message highlighted how smart, proactive lobbying can secure market access. He also warned that operators must always “know the state law in the state that [they’re] operating.”

After clarifying regulatory hurdles, the session pivoted to the operational backbone of safe, scalable drone use. Josh Olds, President and CEO of USI® (the Unmanned Safety Institute) and an award-winning risk management authority for uncrewed aviation, broke down the fundamentals required for reliable commercial operations. “Today, before you fly, the focus is basically three main pillars,” Olds explained. “The operational footprint to know before you fly is organizational, personnel and technology.” He pointed out how the industry today mirrors the complexity of traditional aviation, from airline charter jets down to agricultural spraying. Every use case brings unique risks.

Central to Olds’ argument was the need for standardized training and safety programs, particularly as operations shift from simple line-of-sight missions to complex beyond visual line of sight (BVLOS) flights. “As we move into Part 108, that becomes an approved training program requirement…It’s now up to the organization to submit an approved training program,” Olds said. The implications are clear: “It’s everything from workforce standardization. Not just the pilot, but the technician, the visual observer, the data analyst…training standards that go into that organization’s operations model.”

Olds highlighted that record-keeping and digital logs are becoming vital for both compliance and risk management. “Under Part 108, recordkeeping requirements are key, and they’re robust…You want to have a way of digitally logging telemetry files.” Olds emphasized, “Only thorough tracking of flight hours, maintenance and telemetry will ensure pilots stay proficient and meet regulatory demands.”

Finally, Olds called for a culture of professional development embedded in every level of an organization: “Your safety promotion, your ongoing education training, professional development perspective, to create a safety culture inside the corporation or inside the organization where you’re all speaking the same language when you talk about drones and safety.” The future belongs to fleets running smart safety management systems, with automation and oversight at their core.

No risk management discussion for drone operators is complete without insurance. Alistair Blundy, CEO and Lead Underwriter at ATA, brought this sometimes-overlooked topic, and its financial realities, into sharp focus. “Drone insurance…does not form its own specific part of the insurance market. So as soon as we get out a Phantom Four and we hit the skies, we are in the same risk pool as a Boeing 777 and a commercial airport and an aircraft manufacturer,” Blundy explained, footstomping the maturity and seriousness with which underwriters already treat drone fleets.

Blundy detailed that drone insurance is divided like traditional aviation coverage: into aerospace, airlines and general aviation (GA). “Drone insurance is underwritten in the GA market…by general aviation underwriters, the aviation desk.” Fleet operators need to appreciate that the average insured value for unmanned aircraft today is $250,000, with some units exceeding $35 million. Liability limits soar into the hundreds of millions, indicating that drone operations now sit squarely alongside large-scale aviation risks.

The underwriter shared three cautionary tales of real claims, all rooted in overlooked safety practices or procedural lapses. One incident involved a $15 million unmanned aircraft destroyed after landing with brakes engaged, a mistake stemming from the lack of “shared flight psychology,” as Blundy put it. “The person in control of the aircraft did not see themselves as an aviator, an aviation professional. And that’s what we’re looking for from the underwriting desk,” he said.

Blundy’s advice for risk mitigation was direct. “We just want to empower our partners to act like aviation professionals,” he explained. A strong safety culture, adherence to checklists, and accountability, up to and including corporate insurance policies that cover every pilot and crew member, are all required. “What we learn from each of these…when we look at the proximate cause, the root cause of what went wrong, I think it’s a cultural issue,” Blundy noted.

This approach echoes my own overall vision, where changing liability structures trigger improved safety. The corporation will have to make sure that the pilots go through their processes for Part 108 because that responsibility falls to the corporation.

As the session slewed toward practical application, I challenged the audience to imagine a drone landscape as regulated and reliable as modern elevator rides. Four generations ago, when the elevator was invented, how many people were going into an elevator without an operator? No one. Now, four generations later, it’s the opposite. Nobody uses an elevator with an operator. Generationally, we are getting into the mode of automation.

I tried to make clear that BVLOS and large-scale fleet operations can only succeed with automation, not human oversight. You cannot have air traffic control today handling 100,000 drones delivering packages for Amazon. In my opinion, we are going to see way more automation. The path to safe integration lies in technology-driven compliance and proactive risk management built into every operation.

For solo entrepreneurs, I tried to offer a reality check. The next few years will bring more oversight. There is no long-term future for the loose culture of the early Part 107 era. If we want to integrate crewed and uncrewed aviation in the National Airspace System (NAS), we will have to behave like responsible aviators. All of us.

Drone operations are no longer just about technical expertise or regulatory checklists. They are about embedding safety, compliance and risk management at every level, from boardroom to pilot’s seat. If you are an aviation company, you need to behave like an aviation company, regardless if the pilot is on board or not.

I was proud to join expert voices like Olds, Hazen, and Blundy as we outlined the operational, legal, and insurance essentials to better equip industry professionals to adapt, succeed and thrive in the airspace of tomorrow. Success depends on building systems and culture where safety is encoded, compliance is second nature and every operator, whether commercial or independent, sees themselves first and foremost as an aviation professional. The Wild West days are ending. What comes next will be defined by those prepared to lead in safety, risk management and smart growth.