Metro - File #: 2020-0260

• File #: 2020-0260
• Type: Program
• Status: Passed
• File created: 3/26/2020
• In control: Finance, Budget and Audit Committee
• On agenda: 6/17/2020
• Final action: 6/25/2020
• Title: AUTHORIZE the Chief Executive Officer to negotiate and purchase Public Entity excess liability policies with up to $300 million in limits at a cost not to exceed $14.5 million for the 12-month period effective August 1, 2020 to August 1, 2021.
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Budgeting, Commuter Rail (Project), Expo Line Operating Project (Project), Gold Line Operations (Project), Insurance, Light rail transit, Los Angeles Union Station, Metro Exposition Line, Metro Gold Line, Metro Green Line, Metro Orange Line, Metro Rail A Line, Metro Rail B Line, Metro Rail C Line, Metro Rail E Line, Metro Rail L Line, Metro Red Line, Operations Transportation (Project), Payment, Program, Project management, Public policy, Rail Operations - Blue Line (Project), Rail Operations - Green Line (Project), Rail Operations - Red Line (Project), Rail transit, Railroad commuter service, Safety, Station operations, Transit buses, Transit safety, Union Station Property Management (Project)
• Related files: 2020-0447

Date	Action By	Action	Result
6/25/2020	Board of Directors - Regular Board Meeting

Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
JUNE 17, 2020

Subject
SUBJECT: EXCESS LIABILITY INSURANCE PROGRAM

Action
ACTION: APPROVE RECOMMENDATION

Heading
RECOMMENDATION

Title
AUTHORIZE the Chief Executive Officer to negotiate and purchase Public Entity excess liability policies with up to $300 million in limits at a cost not to exceed $14.5 million for the 12-month period effective August 1, 2020 to August 1, 2021.

Issue
ISSUE

Metro's Public Entity excess liability insurance policies (which includes transit rail and bus operations) expire August 1, 2020. Insurance underwriters will not commit to final pricing until roughly six weeks before our current program expires on August 1st. Consequently, we are requesting a not-to-exceed amount for this renewal pending final pricing and carrier selection. Without this insurance, Metro would be subject to unlimited liability for bodily injury and property damage claims resulting from, primarily, bus and rail operations.

Discussion
DISCUSSION

Our insurance broker, USI Insurance Services ("USI"), is responsible for marketing the excess liability insurance programs to qualified insurance carriers. Quotes are in the process of being received for our Public Entity program by our broker from carriers with A.M. Best ratings indicative of acceptable financial soundness and ability to pay claims.

Staff and USI developed a 2020-2021 Public Entity excess liability insurance renewal strategy with the following objectives. First, our insurance underwriter marketing presentations emphasized the low risk of light rail and bus rapid transit services in addition to safety enhancements and pilot programs added over the past years in order to mitigate insurer's concerns with increased operating exposures. Second, we desired to maintain a continuing diversified mix of international and domestic insurers to maintain competition and reduce our dependence on any single insurance carrier. Third, we desired to m...