PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       7c 
STAFF BRIEFING             Date of Meeting    June 25, 2013 

DATE:    June 17, 2013 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Jeff Hollingsworth, Risk Manager 
SUBJECT:  Briefing on the Port Property Insurance Renewal for the Policy Year
beginning July 1, 2013 
SYNOPSIS: 
This briefing is on the upcoming Port's property insurance renewal. The Port's current
property insurance program expires on June 30, 2013. The Port is in the process of
finalizing the purchase of this coverage for the policy year starting on July 1, 2013, and
expiring on June 30, 2014. 
BACKGROUND: 
The Commission presentation will focus on the issues of renewing the insurance property
program. The Port's property policy covers many hazards and perils that can cause direct
physical damage to Port assets and the ensuing business interruption. It also includes
coverage for direct physical loss caused by electrical and mechanical equipment
(equipment breakdown coverage). The renewal process for this policy includes updating
the Port's underwriter on current assets, revenue streams, and future capital projects.
Claims and losses from the current policy year and prior policy years are reviewed as
well. The Port uses an insurance broker, Hugh Wood, Incorporated, 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's basic property insurance program elements consist of a $750 million
($750,000,000) per occurrence limit at a $1,000,000 per occurrence deductible. Terrorism
coverage is provided with a sub-limit of $350 million per occurrence. Coverage for flood
is capped at an annual aggregate of $25 million above a flat $1,000,000 deductible.
Property insurance coverage extends to contractors of the Port, in addition to the Port, for
property damage to the capital improvements that are in the course of construction. This
"course of construction" coverage has a maximum limit of $50 million per project.
Projects under construction with values that exceed $50 million must be specifically
underwritten. The Port does not purchase earthquake insurance for its property unless it is
part of a stand-alone builder risk property insurance policy specific to a project under
construction. Earthquake insurance is not offered at reasonable cost nor at adequate limits
for the Port to consider purchasing this coverage.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 17, 2013 
Page 2 of 2 

The current state of the insurance markets also dictates the type of pricing that the Port
will obtain on its renewal. Certain property coverage has remained fairly flat in terms of
rate, while other coverage such as wind and flood, and contingent business interruption
coverage have had significant rate increases (over 15%) in 2013. The impact of the 2011
Japanese earthquake and tsunami as well as the storms, wild fires, and flooding from
2012 are causing steeper rate hikes to those properties exposed to those perils. The Port
in the past year has had is total insurable values adjusted upward about 3% from $4.323
billion in value to $4.437 billion in value. Since the Port does not purchase a lot of flood
coverage, and is not located in an area subject to frequent wind events, the pricing rate
increase to the Port is expected to be well below 15%. 
Risk Management will review the final quotes and coverage options that our broker
provides and then consider options to limit or enhance coverage. The goal is to minimize
cost increases (4% to 6% over last year's renewal) but at the same time not under-insure
critical property. Risk Management will review options with division budget and finance
staff to get their input prior to binding coverage on June 30. 
The insurance was renewed on June 30, 2012, at a cost of $1,353,000. The renewal cost
for July 1, 2013, is anticipated to be between $1,370,000 and $1,420,000. 
OTHER DOCUMENTS ASSOCIATED WITH THIS BRIEFING: 
Computer slide presentation. 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
September 11, 2012  Briefing on liability insurance renewal. 
June 5, 2012  Briefing on property insurance renewal.