Hiring a drone services provider? Key liability risks for your business

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Businesses that contract for drone services are not necessarily shielded from liability if the drone operator breaks the law. In many ways, the purchaser of drone services is a passive participant in the flight and the drone operator’s actions. The prudent business owner contracting for drone services should consider the various sources of potential liability. Below, we provides some strategies for businesses to manage these risks.

Non-compliance with the Canadian Aviation Regulations

First and foremost, a drone services provider must comply with drone regulations. In general, the Canadian Aviation Regulations (CARs) prescribe offences for conducting drone operations that violates principles of aviation safety. Transport Canada has broad jurisdiction to investigate and enforce non-compliance with the CARs. As of recently, Canadian law enforcement has also been authorized to issue administrative monetary penalties for violations of the CARs. The failure to comply can result in fines and can impact the operator or a business’ ability to use drones in the future. Depending on the severity of the offence, individual fines range from CA$1,000 to CA$5,000, and fines for businesses range from CA$5,000 to CA$25,000. Some noteworthy offences and fines include:

  • Operating an unmanned aircraft in a manner that is reckless or negligent that endangers or likely endangers the life or property of any person: CA$3,000 for individuals, CA$15,000 for businesses (section 900.10);
  • Failure to hold the mandatory minimum liability insurance: CA$1,000 for individuals, CA$5,000 for businesses (section 900.42);
  • Failure to operate a drone within visual line-of-sight: CA$1,000 for individuals, CA$5,000 for businesses (section 900.13);
  • Failure to operate within authorized airspace: CA$1,000 for individuals, CA$5,000 for businesses (sections 901.04 and 902.09); and
  • Operating an unmanned aircraft during the night: CA$1,000 for individuals, CA$5,000 for businesses (sections 901.07, 902.12 and 902.52).

Civil Liability

Drone operators and the businesses who have hired them may be exposed to civil lawsuits for negligence, trespass, nuisance, and breach of privacy. A drone that wanders or deliberately venture onto private property could result in the operator and the business who hired them, being liable for trespass under the Ontario Trespass to Property Act.

Criminal Liability

Operating a drone outside of the law can also have criminal consequences as well (though most likely for the drone operator personally rather than your business). The Criminal Code of Canada also contains a number of offences including:

  1. operating an aircraft in a manner that is dangerous to the public;
  2. damaging an aircraft while in service in a manner that could endanger the safe operation of the aircraft or airport; and
  3. interfering with the operation of any air navigation facility in a manner likely to endanger the safety of an aircraft in flight.

Strategies to Limit the Potential Liabilities When Contracting With Drone Operators

Having a contract with the drone operator you retain is critical for many reasons. First, it defines the responsibilities of the drone operator. Second, it allows you to build in terms that hopefully insulate your business from liability in the event the drone operator does anything “offside.”

Some key contract clauses to consider including in your business contract with the drone operator include:

  • Provisions against the creation of an agency, employer-employee, or master-servant relationship (in an attempt to avoid vicarious liability);
  • Comprehensive representations and warranties about operational procedures, the airworthiness of the drone, the geographical boundaries of the proposed flight, insurance and other regulatory compliance requirements; and
  • Indemnities and limitation of liability in favour of your business.

The benefits of drones for businesses are abundant, but the failure of the drone operator hired to conduct operations safely, with precision and in accordance with the law can add additional costs and exposure to liability to your business. Staying up-to-date with the regulations is essential, and more information on the new regulations can be found here.

The content of this article is intended to provide a general guide to the subject matter. Specific advice should be sought about your specific circumstances.

This article was co-authored by Rachael Andrew, an articling student in the Toronto office.