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Volume 23 No. 9
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Yankee Stadium secures Safety Act coverage

Yankee Stadium has become the first sports venue to be covered with a federal Safety Act designation and certification from the U.S. Department of Homeland Security, marking the start of what many in the security field believe will be a new era for how threats of terrorism are handled in sports.

The federal recognition gives the New York Yankees, as the award recipient, protection from having to pay claims that might be filed by victims against the club in the event of a terrorist attack at the ballpark. The standing could serve to lower the club’s insurance premiums down the line, as well — a path others in sports could follow by working to receive the DHS-backed recognition.

Officially known as the Support Anti-terrorism by Fostering Effective Technologies Act, the Safety Act aims to promote the creation, deployment and use of anti-terrorism technologies and practices. It was enacted in 2002 in response to the multibillion-dollar lawsuits filed after the Sept. 11, 2001, attacks that left companies concerned they would be sued if security equipment they made or were using failed to stop terrorists.

The designation and certification protect the team from liability in the event of a terrorist attack at Yankee Stadium.
Before September 2001, terrorism was included in most commercial insurance policies in the United States. After the 9/11 attacks, the majority of insurers moved to exclude terrorism from their contracts. Federal lawmakers in 2002 passed the Terrorism Risk Insurance Act, which required all insurers to offer terrorism coverage to their policy holders. The Safety Act followed later in 2002.

Under the legislation, an attack must be certified as an “act of terrorism” by the federal government.

Lori Shaw, director of Aon Risk Solutions’ global entertainment group, said that as more venue owners receive a Safety Act award, it will give that group leverage to negotiate lower premiums.

“From an insurance standpoint we would believe that having this award is something that the insurance carriers will look favorably upon,” she said. “Now that we actually have a team that has received certification, I think carriers will see that it is a viable program, and we can begin to have conversations with insurers who understand this line of business as to what collectively we think it’s worth — and what discounts can we negotiate as a result.”

Shaw likens the prospect of cost savings to the discounts or credits that most carriers now give a team when it gains certain liquor or food service certifications. She also said having a Safety Act award could help teams get better financing terms on loans for future construction or renovation at the venue.

The Yankees would not comment on details of the process. In a statement to SportsBusiness Journal, the club said: “The safety and security of our fans is our top priority, and this award recognizes the extensive measures that we have taken towards this end.”

A Safety Act designation guarantees that the liability for the recipient is limited to the amount of liability insurance coverage already recommended by DHS. The higher certification rating extends those benefits by calling for a court to dismiss lawsuits against entities whose products are DHS-certified. This protection can be overcome only if a lawsuit presents clear and convincing evidence that the company acted fraudulently or with willful misconduct when applying for Safety Act protections.

The Yankees hired Washington, D.C.-based Catalyst Partners to work on the team’s behalf with DHS to secure the award.

DHS evaluated the Yankees’ range of security practices, including physical and electronic game-day policies, documents that spell out various evacuation plans, cyber security, and the hiring, vetting, training, and management oversight of its employees and contractors.

The Yankees’ award is in effect through June 30, 2017. The team will meet with Catalyst frequently through that time to document needs and modify processes.

The NFL received designation and certification standing in December 2008, running through January 2014. In so doing, the league itself received liability exemption against future claims stemming from an attack at any of the nation’s NFL stadiums and at any NFL-run event, such as the Super Bowl, but the benefits do not flow down to the teams themselves.

While the awards are most often given to technology providers, other Safety Act award recipients include the New York Stock Exchange and the Cincinnati/Northern Kentucky International Airport.

“The Yankees are leaders, and when you look at brands that are leaders in their industry, those are the guys that will guide the others through the process,” said Lou Marciani, director of the National Center for Spectator Sports Safety & Security.