Why the SAFETY Act Matters
A brief history of how we got here, and what it means for you.
“The purpose of the SAFETY Act is to ensure that the threat of liability does not deter potential manufacturers or sellers of anti-terrorism technologies from developing and commercializing technologies that could save lives.”
U.S. Department of Homeland Security
A CASE STUDY
The 1993 World Trade Center Bombing
February 26, 1993
On February 26, 1993, at 12:18 p.m., terrorists detonated a vehicle-borne improvised explosive device with approximately 1,200 lbs. TNT-equivalent in the North Tower with the hopes of crashing it into the South Tower.
Attack Details
The explosion created a five-story, 150-feet-wide crater, filled with 4,000 tons of rubble, in the sub-grade levels of the tower and undermined the floor of an adjoining hotel.
Real Lives Impacted
The heinous attack killed six innocent people and injured more than 1,000 others, including 88 firefighters, 35 police officers, and an emergency medical services worker. About 50,000 people evacuated from the WTC complex.
Disproportionate Liability
On October 26, 2012, a six-member jury in New York State Supreme Court unanimously found the Port Authority of New York and New Jersey - the landlord of the World Trade Center - negligent in safeguarding the World Trade Center.
As part of their jaw-dropping decision, the jury found the Port Authority of New York and New Jersey 68% at fault for the attack, while the terrorists who committed the horrific crime just 32% at fault.
This left everyone to question: “how can an organization that was otherwise a victim of a terrorism attack but held more liable than the terrorists who committed the attack?”
ALUMA INSIGHT
It’s almost impossible to recover damages from a terrorist: they are either dead, have no money or you can’t access their money. Yet, people need to recover. As a result, companies who are doing their best to prevent terrorism can be exposed to enterprise-crippling and extraordinarily large third-party liability.
THE IMPACT OF 9/11
A Catalyst For Change
September 11, 2001 was one of the worst days in U.S. history. As a result of the horrific attacks that day, 2,977 innocent people were killed and countless lives were changed forever.
Legal Reality
From a legal standpoint, much of the same fallout from the 1993 WTC case occurred. Businesses that were otherwise victims of the attack faced extraordinarily large third-party liability. Airlines and commercial airplane manufacturers faced multi-billion dollar lawsuits.
The Private Sector Perspective
Immediately following the attacks, industry came to the U.S. Congress expressing real and significant concern. The potential third-party liability facing companies following an act of terrorism is too large for any to withstand. If something does not change, companies would be forced to remove themselves from the fight against terrorism.
U.S. Congress Responds
On November 25, 2002, in direct response to the 9/11 attacks, President George W. Bush signed the Homeland Security Act of 2002. Among other significant achievements, the Homeland Security Act of 2002 accomplished two important things:
Established the U.S. Department of Homeland Security by bringing together 22 disparate agencies under one leadership structure.
Created the SAFETY Act (Support Anti-Terrorism by Fostering Effective Technologies Act of 2002).
ALUMA INSIGHT
The SAFETY Act provides critical third-party liability protections to companies that can demonstrate that they deploy effective security measures focused on “preventing, detecting, identifying, or deterring acts of terrorism or limiting the harm such acts might otherwise cause.”
This includes product manufacturers, service providers, cybersecurity services, venue operators, and more.
Three Distinct Levels of Protection
DTED Designation
A subset of the Designation, the Developmental Testing and Evaluation Designation is designed for those eligible technologies, products and security programs that have demonstrated effectiveness in controlled environments but lack real-world deployment data. The Developmental Testing and Evaluation Designation provides a numerical cap on third-party liability arising from an act of terrorism with specific restrictions in place.
Additional benefits include:
Listed on the DHS SAFETY Act website
Exclusive action in Federal Court
No Joint and Several Liability for non-economic damages
No punitive damages or prejudgment interest
Recovery reduced by amounts from collateral sources
Designation
Most commonly awarded by DHS, the Designation is designed for those eligible technologies, products and security programs that have a proven track record of effectiveness in the field. The Designation provides a numerical cap on third-party liability arising from an act of terrorism. The Designation is typically void of the restrictions included in the Developmental Testing and Evaluation Designation and extends for up to five years before renewal.
Additional benefits include:
Listed on the DHS SAFETY Act website
Exclusive action in Federal Court
No Joint and Several Liability for non-economic damages
No punitive damages or prejudgment interest
Recovery reduced by amounts from collateral sources
Certification
A building block to the Designation, Certification is designed for companies who demonstrate long-term effectiveness and a plan to ensure it will continue to be effective over time. The Certification provides an awarded company the ability to assert Government Contractor Defense that immunizes the awarded company from third-party liability arising from an act of terrorism. This level of coverage requires significant deployment data over time.
Additional benefits include:
Approved Products List for Homeland Security on the DHS SAFETY Act website
Exclusive action in Federal Court
No Joint and Several Liability for non-economic damages
No punitive damages or prejudgment interest
Recovery reduced by amounts from collateral sources
MARKET DIFFERENTIATOR
Flow-Down Immunity
Companies who obtain SAFETY Act for their technology and/or service receive another powerful benefit they can apply to the marketplace. By way of their SAFETY Act award, regardless of award-type, SAFETY Act awarded companies provide flow-down immunity to its customers for third-party claims related to the deployment of their technology or service.
Products
Examples include:
X-ray Screening Equipment
Closed-Circuit Television
Drone Detection Platforms
Incident Management Software
Crash-Rated Vehicle Barriers
Services
Examples include:
Threat, Vulnerability and Risk Assessments
Event Security Services
Cybersecurity Services and Platforms
Explosive Detection Canine Services
Cargo and Mail Screening Services
Venue Operators
Examples include:
24-Hour Building Security
Event Security
Command Center Operations
Loading Dock Operations
Protective Design/Structural Hardening
Key Takeaways
Protecting Your Enterprise
As it relates to limiting third-party liability, benefits include:
Obtain a numerical cap on third-party liability (or immunity)
Potential savings on annual insurance premiums (“good driver discount”)
Exclusive action in federal court
No joint and several liability for non-economic damages
No punitive damages or prejudgment interest
Recovery reduced by amounts from collateral sources
Differentiation In the Marketplace
As it relates to marketplace differentiation, benefits include:
Demonstrate effectiveness of your technology or service to clients by directing them to a third-party, independent evaluation performed by DHS
Flow down liability protections to your customers
Receipt of a DHS SAFETY Act Seal to be used on marketing materials
Listed as approved company on the DHS SAFETY Act website
Intelligence to Act
We help out clients stay “left of the boom”,
while preparing for the right of it.