PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.       7b 
STAFF BRIEFING             Date of Meeting    June 24, 2014 

DATE:    June 5, 2014 
TO:     Tay Yoshitani, Chief Executive Officer 
FROM:    Jeff Hollingsworth, Risk Manager 
SUBJECT:  Briefing on the Port Property Insurance Renewal for the Policy Year
beginning on July 1, 2014 
SYNOPSIS: 
This briefing is on the upcoming Port's property insurance renewal. The Port's current
property insurance program expires on June 30, 2014. The Port is in the process of
finalizing the purchase of this coverage for the policy year starting on July 1, 2014 and
expiring on June 30, 2015. 
BACKGROUND: 
The Commission presentation will focus around 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 basic elements of the property insurance program consist of a $750 Million per
occurrence limit at a $500,000 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 $500,000 deductible. Property insurance
coverage extends to scheduled assets as well as new assets under construction (up to $50
Million in value), including rennovations to existing assets. The insurance is purchased
on a replacement cost basis. The Port does not purchase earthquake insurance for its
property or assets but reviews this coverage annually.  Earthquake insurance is not
currently offered at a reasonable cost nor with adequate limits for the Port to consider
purchasing this coverage. The Port did review earlier this year purchasing a catastrophe
bond with limits of $100 Million but the pricing for that exceeded $3 million in
additional premium a year. The bond was deemed to be to costly for the limits offered.

COMMISSION AGENDA 
Tay Yoshitani, Chief Executive Officer 
June 5, 2014 
Page 2 of 2 

The current state of the insurance markets dictates in a large part the type of pricing that
the Port will obtain on its renewal. Property coverage for the past year has been fairly flat
in terms of the rate per value of insured assets. However, catastrophic  peril coverage
such as for wind, flood, collapse, and earthquake has had rate increases (over 10% to
15%) in 2014. The Port in the past year has had is insurable values adjusted upward about
5.5 % from $4.437 Billion in value to approximately $4.700 Billion in value. The value
of the Port's insurable assets are the largest cost driver of the Port's insurance costs. 
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
premium increases but at the same time not under-insure critical property. Risk
Management will review options with division budget and finance to get their input prior
to binding coverage on June 30th. 
The insurance renewed on June 30, 2013 at a cost of $1,408,643. T he renewal cost for
July 1, 2014 is anticipated to be between $1,490,000 and $1,510,000. 
ATTACHMENTS TO THIS BRIEFING: 
Computer slide presentation. 

PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: 
September 24, 2013  .Briefing on liability insurance renewal 
June 25, 2013  .Briefing on property insurance renewal