might be safer to fly it in a fenced off area (to catch the bits) rather than indoors with all that recirculation.
As far as the legality goes who knows. I would say it's your barn, your machine, etc. might want to take some precautions wrt to medical and fire. Get some extinguishers and hire St Johns.
(I think they give you a murray mint for broken bones) at least then you can say you took precautions etc etc
The web cam is a great idea.