[Code of Federal Regulations]
[Title 6, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 6CFR25.5]

[Page 106-108]
 
                       TITLE 6--HOMELAND SECURITY
 
   CHAPTER I--DEPARTMENT OF HOMELAND SECURITY, OFFICE OF THE SECRETARY
 
PART 25_REGULATIONS TO SUPPORT ANTI-TERRORISM BY FOSTERING EFFECTIVE
 
Sec.  25.5  Obligations of seller.

    (a) Liability Insurance Required. The Seller shall obtain liability 
insurance of such types and in such amounts as shall be required in the 
applicable Designation, which shall be the amounts and types certified 
by the Under Secretary to satisfy otherwise compensable third-party 
claims arising out of, relating to, or resulting from an Act of 
Terrorism when Qualified Anti-Terrorism Technologies have been deployed 
in defense against, response to, or recovery from, such act. The Under 
Secretary may request at any time that the Seller of a Qualified Anti-
Terrorism Technology submit any information that would:
    (1) Assist in determining the amount of liability insurance 
required; or
    (2) Show that the Seller or any other provider of Qualified Anti-
Terrorism Technology otherwise has met all of the requirements of this 
section.
    (b) Amount of Liability Insurance. (1) The Under Secretary may 
determine the appropriate amounts and types of liability insurance that 
the Seller will be required to obtain and maintain based on criteria he 
may establish to satisfy compensable third-party claims arising from, 
relating to or resulting from an Act of Terrorism. In determining the 
amount of liability insurance required, the Under Secretary may consider 
any factor, including, but not limited to, the following:
    (i) The particular Technology at issue;
    (ii) The amount of liability insurance the Seller maintained prior 
to application;
    (iii) The amount of liability insurance maintained by the Seller for 
other Technologies or for the Seller's business as a whole;
    (iv) The amount of liability insurance typically maintained by 
Sellers of comparable Technologies;
    (v) Information regarding the amount of liability insurance offered 
on the world market;
    (vi) Data and history regarding mass casualty losses;
    (vii) The intended use of the Technology; and
    (viii) The possible effects of the cost of insurance on the price of 
the product, and the possible consequences thereof for development, 
production, or deployment of the Technology.
    (2) In determining the appropriate amounts and types of insurance 
that a particular Seller is obligated to carry, the Under Secretary may 
not require any type of insurance or any amount of insurance that is not 
available on the world market, and may not require any type or amount of 
insurance that would unreasonably distort the sales price of the 
Seller's anti-terrorism Technology
    (c) Scope of Coverage. (1) Liability insurance required to be 
obtained pursuant to this section shall, in addition to the Seller, 
protect the following, to the extent of their potential liability for 
involvement in the manufacture, qualification, sale, use, or operation 
of Qualified Anti-Terrorism Technologies deployed in defense against, 
response to, or recovery from, an Act of Terrorism:
    (i) Contractors, subcontractors, suppliers, vendors and customers of 
the Seller.
    (ii) Contractors, subcontractors, suppliers, and vendors of the 
customer.
    (2) Notwithstanding the foregoing, in appropriate instances the 
Under Secretary will specify in a particular Designation that, 
consistent with the Department's interpretation of the SAFETY Act, an 
action for the recovery of damages proximately caused by a Qualified 
Anti-Terrorism Technology that arises out of, relates to, or results 
from an Act of Terrorism may properly be brought only against the Seller 
and, accordingly, the liability insurance required to be obtained 
pursuant to this section shall be required to protect only the Seller.
    (d) Third Party Claims. To the extent available pursuant to the 
SAFETY

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Act, liability insurance required to be obtained pursuant to this 
section shall provide coverage against third party claims arising out 
of, relating to, or resulting from an Act of Terrorism when the 
applicable Qualified Anti-Terrorism Technologies have been deployed in 
defense against, response to, or recovery from such act.
    (e) Reciprocal Waiver of Claims. The Seller shall enter into a 
reciprocal waiver of claims with its contractors, subcontractors, 
suppliers, vendors, and customers, and contractors and subcontractors of 
the customers, involved in the manufacture, sale, use, or operation of 
Qualified Anti-Terrorism Technologies, under which each party to the 
waiver agrees to be responsible for losses, including business 
interruption losses, that it sustains, or for losses sustained by its 
own employees resulting from an activity resulting from an Act of 
Terrorism when Qualified Anti-Terrorism Technologies have been deployed 
in defense against, response to, or recovery from such act. 
Notwithstanding the foregoing, provided that the Seller has used 
diligent efforts in good faith to obtain all required reciprocal 
waivers, obtaining such waivers shall not be a condition precedent or 
subsequent for, nor shall the failure to obtain one or more of such 
waivers adversely affect, the issuance, validity, effectiveness, 
duration, or applicability of a Designation or a Certification. Nothing 
in this paragraph (e) shall be interpreted to render the failure to 
obtain one or more of such waivers a condition precedent or subsequent 
for the issuance, validity, effectiveness, duration, or applicability of 
a Designation or a Certification.
    (f) Information to be Submitted by the Seller. As part of any 
application for a Designation, the Seller shall provide all information 
that may be requested by the Under Secretary or his designee, regarding 
a Seller's liability insurance coverage applicable to third-party claims 
arising out of, relating to, or resulting from an Act of Terrorism when 
the Seller's Qualified Anti-Terrorism Technology has been deployed in 
defense against, response to, or recovery from such act, including:
    (1) Names of insurance companies, policy numbers, and expiration 
dates;
    (2) A description of the types and nature of such insurance 
(including the extent to which the Seller is self-insured or intends to 
self-insure);
    (3) Dollar limits per occurrence and annually of such insurance, 
including any applicable sublimits;
    (4) Deductibles or self-insured retentions, if any, that are 
applicable;
    (5) Any relevant exclusions from coverage under such policies or 
other factors that would affect the amount of insurance proceeds that 
would be available to satisfy third party claims arising out of, 
relating to, or resulting from an Act of Terrorism;
    (6) The price for such insurance, if available, and the per-unit 
amount or percentage of such price directly related to liability 
coverage for the Seller's Qualified Anti-Terrorism Technology deployed 
in defense against, or response to, or recovery from an Act of 
Terrorism;
    (7) Where applicable, whether the liability insurance, in addition 
to the Seller, protects contractors, subcontractors, suppliers, vendors 
and customers of the Seller and contractors, subcontractors, suppliers, 
vendors and customers of the customer to the extent of their potential 
liability for involvement in the manufacture, qualification, sale, use 
or operation of Qualified Anti-terrorism Technologies deployed in 
defense against, response to, or recovery from an Act of Terrorism; and
    (8) Any limitations on such liability insurance.
    (g) Under Secretary's Certification. For each Qualified Anti-
Terrorism Technology, the Under Secretary shall certify the amount of 
liability insurance the Seller is required to carry pursuant to section 
443(a) of title 6, United States Code, and paragraphs (a), (b), and (c) 
of this section. The Under Secretary shall include the insurance 
certification under this section as a part of the applicable 
Designation. The insurance certification may specify a period of time 
for which such insurance certification will apply. The Seller of a 
Qualified Anti-Terrorism Technology may at any time petition the Under

[[Page 108]]

Secretary for a revision of the insurance certification under this 
section, and the Under Secretary may revise such insurance certification 
in response to such a petition. The Under Secretary may at any time 
request information from the Seller regarding the insurance carried by 
the Seller or the amount of insurance available to the Seller.
    (h) Seller's Continuing Obligations. Within 30 days after the Under 
Secretary's insurance certification required by paragraph (g) of this 
section, the Seller shall certify to the Under Secretary in writing that 
the Seller has obtained the required insurance. Within 30 days of each 
anniversary of the issuance of a Designation or at any other time as he 
may determine, the Under Secretary may require, by written notice to the 
Seller, that the Seller certify to the Under Secretary in writing that 
the Seller has maintained the required insurance. The Under Secretary 
may terminate a Designation if the Seller fails to provide any of the 
insurance certifications required by this paragraph (h) or provides a 
false certification.