PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       7f 
STAFF BRIEFING             Date of Meeting   September 8, 2015 

DATE:    August 31, 2015 
TO:     Ted Fick, Chief Executive Officer 
FROM:    Jeff Hollingsworth, Sr. Manager Risk Management 
SUBJECT:  Report on the Port Liability Insurance Renewal for the Policy Year
beginning on October 1, 2015 
SYNOPSIS 
This report is on the upcoming Port's liability insurance renewal. The Port's current
liability insurance program expires on September 30, 2015. The Port is in the process of
finalizing the purchase of this coverage for the policy year starting on October 1, 2015, 
and expiring on September 30, 2016. Under the current delegation of authority, the CEO
has the authority to purchase the insurance. 
BACKGROUND 
The update will focus around the issues of renewing the insurance liability program. The
insurance policies to be renewed include the airport operator's general liability, the nonaviation
general liability, law enforcement 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,
changes in organizational structure, and on-going and new claims. The Port uses an
insurance broker (Alliant) 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.
The Port purchases an airport operator's primary and excess general liability insurance
policy which covers liability claims from third parties that involve property damage
and/or bodily injury that arise out of airport operations. The current limit of liability is
$500 Million ($500,000,000) with a $1 Million ($1,000,000) per occurrence (claim)
retention. Coverage for events stemming from terrorism and/or war is excluded. The
Port's ramp control tower operator, Robinson Aviation, is an insured on this policy to
cover the liability exposure of aircraft movement on the ramp area. This coverage is
currently with ACE Insurance Company. 
The Port purchases a public entity commercial general liability policy (bodily injury and
property damage coverage) which covers losses involving actual or alleged bodily injury
and/or property damage that arises from claims made against the Port by third parties for
non-aviation exposures and operations. This policy has a $1 Million per occurrence

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 21, 2015 
Page 2 of 4 
(claim) retention and a limit of $10 Million per occurrence. This policy also covers
exposures and liabilities that could stem from the wrongful or non-intentional acts of Port
employees, directors, and Commissioners, and employment practices liability. This
policy also covers alleged and actual wrongful acts of the Port's Police operations. This
policy will be endorsed to add the Northwest Seaport Alliance (NWSA) as an additional
insured with regards claims and litigation brought against the NWSA.
With regard to the NWSA, a separate general liabilty policy, to include coverage for
errors and omissions and employment practices, has been purchased in the name of the
NWSA. This policy has a $10 Million dollar limit, and a $5,000 per claim deductible for
general liability and a $10,000 per claim deductible for errors/omissions and employment
practices. A crime policy (fidelity bond) with a $ 1 Million limit was also purchased in
the name of the NWSA. These two policies were bound on August 4, 2015 and will run
through September 30, 2016. The cost of these two policies were split equally between
the Port of Tacoma and Port of Seattle and were charged as a reimbursable to the NSWA.
These policies were used with an amendment made to the Port of Tacoma's broker
Alliant, which allows Alliant to make insurance transactions on behalf of the NSWA. 
Excess to this public entity commercial policy is an excess policy with coverage up to a
$50 Million ($50,000,000) per occurrence limit, which provides coverage for Port marine
exposures (cargo, cruise, marina, and terminal operations). This excess liability policy
also includes coverage for the Port's non-aviation operational, automobile, employee
benefits, and foreign liability exposures. Coverage includes claims resulting from bodily
injury and property damage arising from terrorism acts (under the Terrorism Risk
Insurance Program Reauthorization Act of 2007 and Reauthorized in 2015). This policy
will also be endorsed to add the Northwest Seaport Alliance (NWSA) as an additional
insured with regards claims and litigation brought against the NWSA. 
The Port also purchases smaller policies with limits that range from $ 1 Million to $5
Million that cover its liabilities associated with its role as a fiduciary for Port sponsored
employee benefit plans, employee dishonesty policy (also known as a fidelity bond), and
for liabilities associated with foreign travel. The foreign travel policy has coverage for
emergency medical expenses and coverage for kidnap and ransom. The Port self-insures
its workers' compensation exposure. The Port self-insures all automobile liability
exposures and claims up to $ 1 Million per claim. 
The Port in 2014 added a cyber-liability policy that has limits that range up to $5 Million
depending on the liability, such as a breach, extortion, damage or loss of data, or
liabilities around loss of private protected information. The cyber policy provides
coverage for cyber liabilities that are excluded from coverage in its other liability
policies. 
The Port's renewal rate for insurance depends heavily on the strength of the Port's
indemnity agreements with its lessees, prime tenants, and contractors as well as in

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 21, 2015 
Page 3 of 4 
personal and professional service agreements. The Risk Management Department works
diligently to ensure that contracts have the protections with regard to insurance and
indemnity that minimize the impact to the Port for losses and damages that stem from the
work or operations of Port tenants and contractors. The defense costs for the litigated
Afoa case (trial in February 2015), which involved an injured airport worker, was fully
picked up by the contractor's insurance program, even though the Port was a defendant in
this suit. 
Another underwriting factor is the distinction between operations the Port controls and
runs itself versus what our tenants do. The number and severity of recent paid claims and
litigation as well as reserves on open claims and litigation is also part of the underwriting
review. Examples of Port operations (that the Port manages) that the underwriters will
review closely include the rental car busing operation, marina operations, and airport
parking. 
The current state of the insurance markets also dictates the type of pricing that the Port
will obtain on its renewal. Currently the markets are such that renewal rates for liability
programs are running about 5% increase, unless there are large losses or reserves on open
claims associated with the account. Early indications for the Port's renewal indicate a
22% increase in the cost of its public entity primary liability policy due to long tail
litigated claims, and the reserved legal costs associated with these litigated claims.
However, Port Risk Management is working with its broker to negotiate this proposed
increase down prior to binding the renewal on September 30th. Other options include
possible raising the Port's retention on this policy, lowering the limit of liabiltiy, or
finding a new insurance carrier. By looking at these other options, Risk Management is
hoping to minimize the overall coverage increase of the total renewal to between 10%
and 12% as compared to last year. 
Earlier  this  year  Congress  approved  the  Terrorism  Risk  Insurance  Program
Reauthorization Act of 2015 (TRIA). This act provides reinsurance to private insurers
following a certified act of terrorism. Following the events of 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. The
passing of this act, allows the insurers to offer this coverage on various property and
liability policies. The costs for this coverage, which is a cost addition to a policies base
premium, have come down significantly since 2002 for many types of operations, but not
so much for ports, transit authorities, and airports. 
The Port does not buy this coverage for its airport general liability policy due to a
concern with how an act is certified as "terrorism" as well as pricing. The Port does
purchase this TRIA coverage for liability for its non-aviation operations, and on the
propery insurance. Terrorism coverage excludes damages that result from any use of
chemical, nuclear, or biological sources. However, as part of this renewal, the Port is
looking at a stand-alone terrorism policy, to provide coverage over several policies,

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
August 21, 2015 
Page 4 of 4 
provided by Lloyd's of London syndicates. The standalone policy would replace any of
the TRIA coverages the Port currently purchases (non-aviaiton) and add this coverage to
policies for which this coverage is currently excluded. 
Risk Management will review quotes from our broker and then consider options to limit
proposed price increase. Risk Management is not looking to enhance or add
coverage/limits this year (other than looking at a standalone terrorism policy). It may
have to raise a retention to minimize the proposed price increase in the public entity
primary policy. The goal is to minimize cost increases but at the same time not underinsure
critical operations. Risk Management will review renewal options with division
budget and finance leaders and obtain their input prior to binding coverage on September
30th. 
The insurance renewed on September 30, 2014 at a cost of $804,000. Cyber liability 
coverage was added on December 1, 2014 at a cost of $40,067. The renewal cost for
September 30, 2015 is anticipated to be between $940,000 and $960,000. This estimate
includes a full 12 month premium of cyber liabiltiy coverage and making changes to
minimize the impact of the 22% increase in the primary public entity general liability
policy. Even with the price increase, the final actual 2015 total insurance costs should be
right at or slightly less than what was budgeted for in 2015. The Port's favorable renewal
pricing on its property insurance on July 1, 2015 will off-set the larger than anticipated
increase to the liability insurance program. 

ATTACHMENTS TO THIS BRIEFING 
Computer slide presentation. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
September 30, 2014  Briefing on liability insurance renewal. 
June 9, 2015  Briefing on property insurance renewal.