# Presentation: 708861

## 30th Annual Airport ConferenceHershey, PA – March 8, 2007Airport Liability Insurance Coverage

**Stephen Dinsdale**
**Senior Vice President**

## Airport Liability Insurance Coverage

**Key Exposures – Hazardous Operations**
**Loss Frequency**
**Loss Severity**
**Loss Mitigation**
**Liability Coverage**

## Key Exposures

_**Airside**_
- Runway Marking
- Free Clear Zones (trees)
- Construction – changed Taxiways
- Runways & Taxiway Condition
- Apron Areas
- Ramp Services
- Electrical Maintenance
- ATC / Ramp ATC
- Parachuting / Hangaring / Air Meets

## Key Exposures

_**Terminal**_
- Slips, Trips, Falls
- Construction – unfamiliarity
_**Other**_
- Taxis – Shuttle buses
- H5NI

## Loss Frequency *

***Benchmark Study***
- 175+ commercial airports
- 2000 - 2006 liability claims
- Analyzed by Hub Type
- 		Large 6.6 million + enplanements
- 		Medium 1.6 to 6.6 million
- 		Small 330,534 - 1.6
- 		Non-Hub 10,001 to 330,534

## Loss Frequency *

***Incident Rates***** **
- Based on:
- ACE USA Airport Liability claims data
- Dollar Cost of Claims
- Number of Liability Claims
- Enplanements
- Aircraft Operations

## Loss Frequency *

***Benchmarking Considerations***
- Variety of Operations and Services
- Liability claim cost variance
- Claims Handling Methods
- *	Information for this Loss Frequency section is taken from the presentation by Ginga Griffin of ESIS, at the ACI-NA Insurance & Risk Management Seminar on 1/12/2007 and is proprietary information to ACE and ACE INA.  This cannot be reproduced or distributed in anyway without our permission.

## Number of Claims Per 1 Million EnplanementsValued 11/06

- ACE USA data

- *2005 and 2006 data not fully developed
- **2006 - 11 months data

**Notes:**
The first chart slide shows the number of claims per 1 million enplanements for the 4 hub categories.

Keep in mind for all these slides that the prior years have more “developed” data.  

Years 2005 and 2006 would be greener or will likely be higher in the future.

So for Large hubs you might observe that the total number of liability claims per 1 million enplanements should range between 2.2 and 3.8

For medium hubs, your total number of claims should range between 2.77 and 5.5 claims per 1 million enplanements.

Small hubs might range 5.5 to 9.6 per 1 million enplanements.

For non-hubs, most of which have few enplanements, you might want to refer to the next slide

## Number of Claims Per 100,000 Aircraft OperationsValued 11/06

- ACE USA Data

- *2005 and 2006 data not fully developed
- **2006 - 11 months data

**Notes:**
This second slide shows the number of Claims per 100,000 aircraft operations, or airport take-offs and landings.

Again, it might be better to use operations as a common denominator for small and non-hubs

For small hubs - the total claims per 100,000 operations range between 2.9 and 4.3 claims.

For non-hubs - the total claims per 100,000 operations range between .96 or 1 claim and 1.8 claims.

## Claim Costs Per 1 Million EnplanementsValued 11/06

- ACE USA Data

- * 2005 and 2006 data not fully developed
- **11 months data
- *** Large loss omitted

- ***

**Notes:**
This third slide provides incidents rates of the total incurred cost of the claims per 1 million enplanements by hub type by year.

As risk managers, you know that the severity of the claims can vary any year and you will see that in this table and chart.

Using this as a benchmark for your large hub airport, you might compare your airport cost per 1 million enplanements  with the range shown from $28,444 to $85,425 per 1 million enplanements.  

For a medium hub, the incident rate ranges between $14,979 to $51,891
You might say some of these ranges are too large.  In that case you can drop off the highest and lowest numbers or even average out the years if you like.

For small and non-hub, you might want to utilize the next slide.

## Claim Cost Per 100,000 Aircraft OperationsValued 11/06

- ACE USA Data

- *2005 and 2006 data not fully developed
- **11 months data
- *** Large loss omitted

- ***

**Notes:**
For non-hub you might want to consider the using operations as denominator and compare your results with the total cost of liability claims per 100,000 Operations.  
For non- hubs – the range is between  $7.034 and $35,492.

The asterisks by the year 2004 for non-hubs represent the fact that I omitted a large loss that would have skewed the numbers greatly.  
It is felt it would not add any information for benchmarking.  

So the range for non hub should still be considered between $7000 and $35,000.

For small hubs, the total cost of liability claims per 100,000 operations should range  from $9154 to $21,930.

## Percentage of Claim Cost by Accident Type – Year 2006

**Percentage of Claim Cost by Accident Type – Year 2006**

- ACE USA Data

**Notes:**
We analyzed the airport liability claims by accident type for the year 2006. 

This pie chart shows the percentage of costs of accidents by type and FALLS continues to cost airports the most with 57.8%

The next is Aircraft damage with 25.8% and Vehicle Damage with 10.2%.  

Persons being struck by objects resulted in 4.3% of the cost.

The other accident types, property damage, cuts, bit by dog, caught in escalator and elevator and other bodily injury  resulted in less than 1% of the cost of the claims.

## Percentage of Number of Claims by Accident Type – Year 2006

- ACE USA Data

**Notes:**
This pie chart shows the breakdown by the percentage of the total number of the claims by accident type.

Falls represented 45% of the claims

 Vehicle damage represented a high frequency of claims with 20.6% 

Aircraft damage was 9.5% or about 10% of the number of claims but as we saw in the last chart 26% of the losses.

## Loss Mitigation

_**Airside**_
- Improved Technology
- Ground Radar
- FAA Advisory 120-92 (SMS) / ICAO
- Clear Signage, especially when taxiways are changed
- Security
- Inspections
- EMAS or Overrun?

## Loss Mitigation

_**Terminal**_
- Vigilance
- Risk Transfer
- 		Janitorial
- 		Skycaps
- 		Wheelchairs

## Liability Policy Coverage – Summary

**A. Coverage**
- Bodily Injury – Broad Form
- Property Damage – Broad Form
- This slide and the following slides summarize customary
- policy provisions.  Please see actual policy for all
- terms and conditions.

## Liability Policy Coverage - Summary

**Policy Coverage**
**Personal Injury**
**Advertising Injury**
**Incidental Malpractice**

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Products-Completed Operations**
**Hangarkeeper’s Liability (excluding flight)**
**Non-owned Aircraft Liability (no seat limitations)**

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Excess Employers’ Liability**
**Excess Automobile Liability**

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Host Liquor Liability**
**Coverage for Airmeets (over 5 mil primary****)**

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Operations necessary or incidental to the ownership, maintenance or use of the airport**.
**Contractual Liability**

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Usually no exclusion for autos or watercraft while on the “airport”**
**Cover generally applies to autos or watercraft, while off the airport if responding to an **_**aviation emergency**_**.**

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Cover for the Insured’s liability under Mutual                                 Aid Agreements**
**Control Tower                                    (Contingent / Indirect)****                                              **

## Liability Policy Coverage - Summary

**Policy Coverage (cont’d)**
**Fire Damage can be amended to cover premises temporarily occupied by the Named Insured.**
**Fellow employee exclusion can**
**	****be deleted.**
**Medical Payments**

## Liability Policy Coverage - Summary

**B. Common Coverage Exclusions**

## Liability Policy Coverage - Summary

**BI/PD Exclusions**
**Aircraft, Auto or Watercraft - while off the airport premises except when responding to an aviation emergency.**
**Mobile Equipment - bodily injury or property damage is excluded when mobile equipment is in transport, or being used in a contest or any stunting activity.**

## Liability Policy Coverage - Summary

**BI/PD Exclusions Continued**
**Airmeet, Contest or Exhibition**
**Swimming Pools or Lodging Accommodation**
**Control Tower – if maintained / operated by the Named Insured.**
**Damage to Property**
**Damage to Your Product / Damage to Your Work**

## Liability Policy Coverage - Summary

_**EXCLUSIONS**_
**Hangarkeepers Liability **
**Excludes aircraft in flight, and owned, rented or leased by insured.  **
**Excludes aircraft not in your care, custody, and control.**

## Liability Policy Coverage - Summary

_**EXCLUSIONS**_
**Non-Owned Aircraft Liability**
**Excludes aircraft, property damage**
**Excludes workers’ compensation**
**Excludes employment related claims**