Metro - File #: 2020-0350

• File #: 2020-0350
• Type: Program
• Status: Passed
• File created: 5/13/2020
• 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 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 3 Project (Project) with up to $200 million in additional limits at a cost not to exceed $6.5 million for the period effective July 1, 2020 to July 1, 2027 (and products/completed operations coverage to July 1, 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/Purple Line Extension Phase 1, Westside Subway Extension/Purple Line Extension Phase 2, Westside Subway Extension/Purple Line Extension Phase 3, Westside Subwy Ext. Section 3 (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: 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 3 Project (Project) with up to $200 million in additional limits at a cost not to exceed $6.5 million for the period effective July 1, 2020 to July 1, 2027 (and products/completed operations coverage to July 1, 2037).

Issue
ISSUE

Metro is concerned about the financial implications of an unanticipated loss resulting from 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 3 Project

Dedicated limits of insurance coverage for the Project are provided by two Design Build (DB) contractors: Tutor Perini/O&G, Joint Venture (TPOG, JV) for the stations and Frontier-Kemper/Tutor Perini, Joint Venture (FKTP) for the tunnels. The liability insurance on the Project, which covers the negligent injury or death and/or property damage to others, is $350 million for each contract, which are mutually exclusive. The coverage that is the subject of this report will provide an additional $200 million for the project, for a total of $550 million in liability coverage. The coverage will also include products and completed operations insurance 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 concentr...