DHS moves forward with rule on liability

Technology companies will soon be able to apply for liability protection under the Safety Act, executives learned at a Tuesday conference with Department of Homeland Security officials.

That's because Homeland Security Secretary Tom Ridge signed an interim rule Oct. 10 that implements the act. The interim rule is available at www.safetyact.gov, and was published in the Federal Register Oct. 16.

The Safety Act, part of the Homeland Security Act of 2002, limits the liability of sellers of qualified anti-terrorism technologies if a terrorist attack occurs and the sellers' products or services fail through no fault of the seller.

Ridge wrote that the interim rule is effective immediately upon publication in the Federal Register because "its aim is to foster the development and deployment of anti-terrorism technologies ? The Department believes that the current development of anti-terrorism technologies has been slowed due to the potential liability risks associated with their development and eventual deployment."

Companies must apply to DHS for Safety Act protection. The application form should be available within days at the Safety Act Web site, DHS officials said.

Originally, officials said the application form would be available by Sept. 1. However, the department received more than 50 substantive comments on its proposed rule, which was published July 11, and needed additional time to address those comments in the interim rule and application form, said Parney Albright, the department's assistant secretary for science and technology.

DHS is asking for comments on the interim rule within 60 days of its publication in the Federal Register. Comments may be submitted at www.regulations.gov or dms.dot.gov.

"This is groundbreaking legislation," Albright said. "That's why this is an interim rule and not a final rule. We thought it was very important that we leave ourselves open to comment."

According to the act, sellers are only required to carry an amount of liability insurance that is available "at prices and terms that will not unreasonably distort the sales price" of the technology.

Applicants for liability protection must submit a wealth of information to the department in three categories, according to the DHS conference presentation:

  • Business Evaluation, including the cost of the technology, profit margins, the effect of insurance on profit and revenue from the technology

  • Insurance Evaluation, including coverage levels and expenditures, loss history and risk management plan

  • Technical Evaluation, including a description of the technology, what it will do, how it will be used, an assessment of the technology's effectiveness and the risk to the public if the technology is not deployed.


  • It's not known how many applications for protection the department will receive. "We could get five, 500 or 5,000," Albright said.

    He said the department is prepared, however, no matter how many applications arrive. The staffs of the department's Science and Technology Directorate; the government's national labs; and the Institute for Defense Analyses, a federally funded research and development center in Alexandria, Va.; have been drafted to review applications, Albright said.

    Most applications will be handled within 150 days, at which time the department will approve or deny protection under the act, or ask for more information, Albright said.

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