7b supp
ITEM NO: 7b_Supp DATE OF MEETING:__9/11/2012______ Liability Insurance Renewal Update Presented September 11, 2012 Jeff Hollingsworth, Risk Manager Outline of Presentation Review of Liability Insurance Coverage Insurance Premium Factors Premium Re-Cap Renewal Coverage Process Expiring Premium 2011-2012 Renewal Issues 2012-2013 2 Liability Insurance Coverage Coverage Description of Exposure Covered Law Enforcement Police operations Public Officials Wrongful acts of Port employees Employment Wrongful acts of Port with respect to employees Practices Non-Aviation Non-aviation operations Aviation Airport operations only Auto Automobile liability (Above what is self insured) 3 Liability Insurance Coverage Coverage Description of Exposure Covered Fiduciary Liability of managing employee benefit plans Foreign Port employees who are in foreign countries Crime Dishonest acts of Port employees Vessel Police boat and other owned vessels Bonds Self-insured pension bonds, notary bonds, custom bonds, etc.. Excess Workers Not purchasing. Compensation 4 Insurance Premium Factors Total operating-capital budget/payroll Past losses and claims Strength of our indemnity agreements with tenants Indemnity/transfer in construction contracts Operations directly controlled by Port versus tenant controlled operations 5 Insurance Premium Factors Size of automobile fleet and how utilized Inter-local agreements Number of employees and payroll Airport enplanements, Seaport TEUs, Eastside Rail Corridor, cruise passengers/vessel calls 6 Insurance Premium Factors Insurance markets External events in the marketplace Amount of Port's deductible Limits requested Special coverage requests 7 $600,000,000 $1,600,000 Liability Insurance Premium Versus Total Revenue -Liability Premium *Port Revenue $1,400,000 $500,000,000 $1,200,000 $400,000,000 $1,000,000 Premiun $300,000,000 $800,000 Reverue Liability Port $600,000 "g": $400,000 $100,000,000 | | | l | | | | | | $200,000 l l | l l I | | | | I l l 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Est 8 Renewal Coverage Process Coverage will run 10/1/2012 to 9/30/2013 Risk Management department networks with other port and Airport entities to check current limits, deductibles, and coverage offered in the marketplace. Update to broker of operations, and current claims and litigation. Port's broker markets the coverage and solicits insurance bids and coverage on the Port's behalf. Risk Management reviews insurance proposals and discusses issues/costs with Division management prior to binding coverage. 9 Expiring Premium: 2011-2012 Coverage Line Limits Deductible Expiring Premium 10/1/2011-9/30/2012 Non-Aviation $50 Million $1,000,000 $435,000 Airport $500 Million $50,000 $282,000 Police $10 Million $1,000,000 Included in Non-Aviation Auto Self Insured First Million Self-Insured No Premium Self insured Vessels $ 1 Million $5,000 $21,000 Public Officials and $10 Million $1,000,000 Included in Non-Aviation Employment Practices Other Coverage: Crime, Varies Varies $38,000 Fiduciary, Foreign, Bonds Total = $776,000 10 Coverage Issues For 2012-2013 (To Be Finalized In Discussion With Divisions prior to 10/1/2012) Terrorism Purchase for non-aviation liability policies Airport Limits Keep at $500 Million Ramp Insurance at Airport Continue to purchase for ramp control vendor Excess Worker Compensation Not pursuing Cyber Liabiltiy Coverage To look at over the course of next year 11 Operational Issues 2012-2013 (To Be Reviewed In Discussion With Divisions prior to 10/1/2012) Real Estate Division Eastside Rail Corridor operating volumes should not be significant enough to impact premium Maintenance of East Marginal Way Grade Separation Special events/use of Port parks Aviation Division Landside Busing Operations Coverage for operations between terminal and RCF/Bus Maintenance Facilities Renewal Estimate~ $780,000 to $800,000 12
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