Metro - File #: 2017-0702

• File #: 2017-0702
• Type: Program
• Status: Agenda Ready
• File created: 10/10/2017
• In control: Finance, Budget and Audit Committee
• On agenda: 5/16/2018
• Title: AUTHORIZE the Chief Executive Officer to negotiate and purchase additional construction project umbrella liability insurance policies (also known as a super excess general liability insurance program) for construction of the Metro Westside Purple Line Extension Section 2 Project (the Project) with up to $300 million in additional limits at a cost not to exceed $4.9 million for the period effective June 6, 2017 to June 6, 2027 (and products/completed operations coverage to June 6, 2037).
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Budgeting, Construction, Contractors, Design build, Insurance, Metro Purple Line, Metro Rail D Line, Metro Vision 2028 Plan, Program, Project, Project management, Purchasing, Twenty-eight by '28 Initiative, Westside Subway Extension Section 2 (Project), Westside Subway Extension/Purple Line Extension Phase 1, Westside Subway Extension/Purple Line Extension Phase 2

Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
MAY 16, 2018

Subject
SUBJECT: MAJOR CONSTRUCTION UMBRELLA INSURANCE
PROGRAM

Action
ACTION: PURCHASE UMBRELLA INSURANCE

Heading
RECOMMENDATION

Title
AUTHORIZE the Chief Executive Officer to negotiate and purchase additional construction project umbrella liability insurance policies (also known as a super excess general liability insurance program) for construction of the Metro Westside Purple Line Extension Section 2 Project (the Project) with up to $300 million in additional limits at a cost not to exceed $4.9 million for the period effective June 6, 2017 to June 6, 2027 (and products/completed operations coverage to June 6, 2037).

Issue
ISSUE

Metro is concerned about the financial implications of an unanticipated loss resulting in major damage to adjacent properties and/or loss of life/injury on our major transit construction projects. Such risk can be mitigated reasonably through the purchase of additional insurance.

Discussion
BACKGROUND

Existing Liability Insurance Coverage for the Metro Westside Purple Line Extension Section 2 Project

Dedicated limits of insurance coverage for the Metro Westside Purple Line Extension Section 2 Project are provided by the Design Build (DB) contractor, Tutor Perini/O&G, A Joint Venture. The liability insurance on the Project, which covers the negligent injury or death and/or property damage to others, is $350 million. This coverage also includes products and completed operations for ten years following the revenue service date and will respond to latent defects which cause injury or death, or real property damage to other people. The coverage limits take into account aspects such as concentration of property values near the Project, population density, tunneling, project duration, and other factors. The contract award value of the Project was $1,376,500,000.

Risk Exposure Above Existing Coverage

Despite using liability insurance limits toward t...