That’s why the federal government, as a means to incentivize companies that develop technology used to combat these acts, established the Support Anti-Terrorism by Fostering Effective Technologies Act of 2002 – also known as the SAFETY Act – as part of the Homeland Security Act. The SAFETY Act is intended to help encourage innovation that can save lives by mitigating the liability that could result from this innovation. SAFETY Act coverage shields qualified parties from claims that arise as a result of the technology’s use in the prevention, response to, or recovery from a terrorist act.

Protection by this act is available to qualified sellers of “any technology designed, developed, modified, procured, or sold for the purpose of preventing, detecting, identifying, or deterring acts of terrorism or limiting the harm such acts might otherwise cause.” The technology eligible to be a Qualified Antiterrorism Technology, or QATT, includes “any product, equipment, service (including support services), device, or technology (including information technology) or any combination of the foregoing. Design services, consulting services, engineering services, software development services, software integration services, threat assessments, vulnerability studies, and other analyses relevant to homeland security may be deemed a Technology.”

There are many benefits of becoming certified under this act. These include
1) the Department setting the limits of insurance you are required to buy,
2) the seller’s liability being limited to that amount of insurance, and 3) the barring of punitive damages and pre-judgment interest.

Coverage afforded under this act is much broader than what is offered under TRIA. Under TRIA, the term “act of terrorism” means any act that is certified by the Secretary of the Treasury. However, under the SAFETY Act, the act simply has to have met the following requirements as defined and specified by the Secretary of Homeland Security:
• The act is unlawful
• The act causes harm, including financial harm, to a person, property, or entity, in the U.S., or in case of a domestic U.S. air carrier or U.S. flag vessel

As an example, the Boston Marathon bombing was not declared an “act of terrorism” by the Secretary of State; under TRIA there would have been no coverage, but there would have been under the SAFETY Act.

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This article was originally published by AmWINS Group, Inc., a leading wholesale distributor of specialty insurance products and services. AmWINS publishes The Edge, a monthly email with informative and timely articles for P&C and benefits insurance agents and brokers. To sign up to receive The Edge or for more information about AmWINS, visit amwins.com.
Legal Disclaimer: Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
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