Public Transit Liability – SIR and Excess

More Liability Options For US Public Transit

The US insurance market for public transit is finally opening up and offering more good choices from A 15 US domiciled carriers, even for accounts with light rail! After 9/11, the market shrank substantially for all insured’s, including public transit authorities.  Due to catastrophe potential and high limit needs, the market place for these unique public entities has been slow to recover.  The long sustained profitability for insurance carriers and the resulting soft market we see today, coupled with onshore movement of the Bermuda and London based carriers has expanded US offerings in both the lead SIR options and the capacity.  With the additional options, there is competition in this segment and clients are seeing options with more coverage at lower prices! You and your public entity transit client have a choice! You can now access US domiciled or multiple carriers, instead of going overseas or being locked into one carrier for your liability coverage. The US markets are strong and ready to compete for this once difficult business.

Apex Insurance has the specialized brokerage force to bring cutting edge insurance solutions and competition to the public transportation marketplace.

Total Domestic Capacity of $200M+ is Possible!!!

Give us a call today to discuss the possibilities for your public transit risk.

541-344-5411

2011 PRIMA National Fun Run/Walk – Portland, Oregon

Apex Insurance Services (Formerly Global Intermediaries) is doing it again! Get ready for the 2011 PRIMA Fun Run/Walk. The event is designed to be a fun, organized, morning stroll with your Risk Management friends. We hope to reach 200 participants this year!

Located in the running capitol of the world, Eugene, Oregon, GIE has been part of every Fun Run/Walk held over the past 14 years. As a proud sponsor of this event, these Fun Run/Walks have helped contribute to our company’s identity and philosophy. We enjoy sponsoring an event that promotes health, physical fitness, camaraderie, and the great outdoors. Anyone can host a dinner or happy hour, but how many companies host an event that focuses on your well being? If you do business with us, run or walk in one of our events, Thank You! You have helped contribute to a better future for you and GIE.

Registration Form

 

Route Map

Low Self-Insured Retention vs. High Policy Limits

What’s More Important? A Low SIR or High Policy Limits?

In today’s volatile public entity insurance marketplace I find myself regularly answering this question. Everyone jumps to “stability”, and public entities believe stability means grabbing hold of your SIR and not letting go.

As insurance markets start to raise the self-insured retentions of large public entities, due to loss activity or the economy, many entities fight to keep their current SIR by sacrificing higher policy limits. At the same time, lawsuits are increasing in size and number in all coverage areas (View Settlements PDF). Many public entities are maintaining lower policy limits when the threat of high dollar lawsuits is actually increasing! Now here’s the kicker… Private equity firms are now financing these high dollar lawsuits in the hopes of receiving better investment returns. (Source Article) This information, recent inflation fears, and a possible turn in the insurance market make me wonder whether we should be fighting for the low SIR or a higher limit.

So What Can You Do?

First, determine the correct SIR for your account; it’s usually above the working (or frequency) layer. Positioning the SIR allows for the most cost effective transfer of risk, enabling you to keep premiums at a minimum while still achieving your goal of protection from market swings. SIR’s should be set to handle one large claim every 5 to 6 years. If your current SIR is above or below that level, it may need to be reset. If you don’t know if your SIR is correctly positioned, call us, we analyze SIRs and loss histories for a living.

Second, determine what policy limits you might need. Many public entities in states with strong tort law buy lower limits as they feel comfortable with the tort protection. However, even in tort protected states, these entities are NOT protected from the Federal Claims found in Section 1983 and the claims associated with violating those laws. These claims are mostly EPLI and law enforcement related, so be sure to weigh your exposure in those areas. Keep in mind that tort statutes have been broken across the country. If your local tort statute is broken you’ll be vulnerable to all negligence based claims and that tort protection will no longer exist.

Odds are that your public entity can likely absorb an additional $500k to $1 million due to an increase in the SIR, but if your limits are too low can you handle another $10 million from a lawsuit gone bad? Imagine having to pay $5-$10 million in this economy because you didn’t take the time to consider the changing marketplace and the possibility of a large claim. Ultimately, the decision is up to you, but if you’re sacrificing limits for a lower SIR, then you may need to reconsider your choice!

Federal, Out of State Auto, and Contractual Coverage

  • Many public entities reside in states with caps for tort claims, such as auto accidents, trip and fall, and other negligence based claims.  These caps are often confused with the unlimited nature of other areas of exposure for the public entity such as, federal claims found in section 1983, which protects certain rights of all Americans.  Those federal claims are unlimited in the damages that can be awarded and represent a very big exposure for any public entity.  Every entity in every state has an unlimited exposure to federal claims.
  • All entities would like coverage for the unlimited federal claims while using their immunity for the tort claims if it’s available.  Given this fact, GIE has designed a product to cover the unlimited federal claims and exclude the tort capped claims.  This product is often called a Tort Wrap, or “Federal, Out of State, and Contractual Coverage”.
  • It’s simple, for a substantial discount of 30% or more, coverage for any tort capped claim is excluded via endorsement from a very broad public entity policy.  The coverage left is normally for federal, out of state auto, and contractual claims.  This is a very efficient method to provide coverage for just the areas that need the protection!

For a quote on this coverage, please contact our team at 1-541-344-5411