PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7a 
STAFF BRIEFING 
Date of Meeting    September 30, 2014 
DATE:    September 10, 2014 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Jeff Hollingsworth, Risk Manager 
SUBJECT:  Briefing on the Port Liability Insurance Renewal for the Policy Year
beginning on October 1, 2014 
SYNOPSIS 
This briefing is on the upcoming Port's liability insurance renewal. The Port's current
liability insurance program expires on September 30, 2014. The Port is in the process of
finalizing the purchase of this coverage for the policy year starting on October 1, 2014
and expiring on September 30, 2015. 
BACKGROUND 
The Commission presentation will focus around the issues of renewing the insurance
liability program.  The primary insurance policies to be renewed include the airport
operators general liability, the non-aviation general liability, police professional liability,
public official's liability, fiduciary liability, and employee dishonesty (crime). The
renewal process for these policies include updating the Port underwriters on current and
forecast finances, the operating budget, current and ongoing operations, and on-going and
new claims. The Port uses an insurance broker, Alliant Insurance Services, Inc., to help
collect and aggregate the renewal data and then submit the data to incumbent and
prospective insurance carriers to obtain quotes for the renewal. 
Additional factors to those mentioned above, include the strength of the Port's indemnity
agreements with its lessees, prime tenants, and contractors as well as in personal and
professional service agreements. The distinction between operations the Port controls and
runs itself versus what our tenants do is also a factor. The number and magnitude of
current and recently closed claims is also part of the underwriting review. 
The current state of the insurance markets also dictates the type of pricing that the Port
will obtain on its renewal. Cost of coverage for general liability insurance continues to be
mainly flat, while areas such as errors and omissions, directors/officers, and public
official's liability have had market increases of 2% to 5% compared to 2013. The Port
self-insures auto liability for the first million but then insures this exposure (to include all
Port vehicle operations) through excess insurance coverage, up to $50 million limit. The
size of the Port's fleet has a direct impact on the cost for this coverage. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 10, 2014 
Page 2 of 3 

Each policies specific deductible and the limits of the policy will also impact the cost of
coverage. In general, higher deductibles and lower limits will result in lower premium
costs. Adding on non-standard coverage such as for terrorism or cyber liability will add
to the cost insurance. 
One issue that could potentially impact coverage in the upcoming year, following the
renewal, is the outcome of the proposed re-authorization of the Terrorism Risk Insurance
Program Reauthorization Act. Following 9/11  insurance companies added exclusions
into their policies to void coverage for losses caused by acts of terrorism. Congress in
2002 passed the original Terrorism Risk Insurance Act. This original act, which has been
extended several times, will expire on 12/31/2014. 
The House and the Senate currently have two bills that are in committee which would
both extend the act (coverage) and modify the current structure of the coverage. The
Senate version has already passed its committee vote in June of this year. The House
version has not been put to committee vote. Both versions have differences, but
essentially continue having the Federal Government serve as a backstop (or excess
carrier) behind primary insurance issued by licensed private carriers. The House Bill
would clarify the process in how a terrorism event is certified, as currently, the language
on what exactly constitutes a covered terrorism event is unclear; as well as who exactly
would make this certification. 
For many companies, the terrorism backstop that the TRIA (Act) coverage provides,
allows private insurers to continue to offer terrorism coverage under workers
compensation policies. The Port currently is 100% self-insured for workers
compensation, thus, whether the Act is reauthorized or not, does not impact this exposure
area of the Port. However, the Port does purchase terrorism coverage for exposures that
are non-aviation related, thus the failure of the act to pass in Congress could impact Port
renewals in 2016. The Port has not purchased terrorism coverage through the Act for its
airport liability exposures. This has been due to cost, and the uncertainty in what defines
a covered terrorism activity in accordance with language in the Act. Terrorism coverage
is available in the surplus lines markets and in the London syndicates, outside of what the
Act provides; however there are limitations on limits of coverage per event, annual caps
on coverage as a whole, and narrowly written coverage forms. The Port, for its property
insurance policy (renewed on July 1, 2014), has a non-TRIA terrorism coverage sublimit
as part of that policy. 
The Port is also looking to purchase cyber coverage for its network exposures to include
data breach, privacy liability, network security, and network extortion. The Port has not
purchased this coverage in the past. In the past five years, coverage forms for these
exposures have improved in terms of the coverage available to the insureds, limits have
gone up, cost of coverage has gone down, and exclusions in the policies been made more
clear. At the same time, exclusions for wrongful acts, and other liabilities associated with

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
September 10, 2014 
Page 3 of 3 
running a network have been added to traditional policies purchased by insureds. Thus,
the cyber liability coverage policies now offered, in some ways add back coverage that
the Port's other policies now exclude. Risk Management  is working with ICT in
reviewing the coverage, terms and conditions, and assisting with the completion of the
information the underwriters need in order for to make a quote of coverage to the Port. It
is estimated the cost of the coverage will be $60,000 to $70,000. This additional cost
could be accommodated within the 2014 insurance budget. 
Risk Management will review quotes our broker provides and then consider options to
limit or enhance coverage. The goal is to minimize cost increases but at the same time not
under-insure critical operations. Risk Management will review options with division
budget and finance to get their input prior to binding coverage on September 30th. 
The insurance renewed on September 30, 2013 at a cost of $801,000. The renewal cost
for September 30, 2014 is anticipated to be between $805,000 and $815,000 (or $870,000
to $885,000 with cyber coverage). 
ATTACHMENTS TO THIS BRIEFING 
Computer slide presentation.