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Airline Agreements 9 side coverage, but a significant number (27%) require $5 million. On the airside, most airports require between $5 and $10 million. Workers Compensation. Most airports (90%) require workers compensation coverage as required and in amounts specified by state law, with 86% requiring employer's liability. Property Insurance. If property insurance is required the agreement generally specifies full replacement value. Policy Requirements A vast majority of airline agreements (98%) require an Insurance Certificate, but only 4% require an actual copy of the policy. Some agreements do give the airport the right to request a copy of the policy at its discretion. Ninety-six percent (96%) of agreements require the airport to be designated as an additional insured; however, only 50% require an actual policy endorsement. The standard requirement for notification of policy cancellation or change is 30 days. Airports are split on the issue of requiring the airline coverage to be primary and non- contributory with a small majority (53%) requiring this provision. Eighty percent (80%) of airports require the policy form to be an occurrence versus claims- made basis. Most agreements (62%) did not specify a penalty for failure to maintain insurance, although in most agreements this failure would be considered an event of default. A cross-liability clause is not generally specified in newer airline agreements. Sixty-one percent of airports in the ACI study did not specify a minimum financial rating for the insurance carrier for the airlines; however, there is a trend in newer agreements to specify a high financial rating. Most airports (67%) require a waiver of subrogation in the agreement and there is an increas- ing trend for this requirement. Most agreements (70%) allow a periodic review of airline insurance to ensure adequacy. Self insurance is a particularly difficult issue in airline agreements. In the ACI survey asking if self insurance is allowed, 30% of airports said yes, 33% said no, and 37% were silent. This is an area for careful consideration by the airport. The risk of self insurance is that there is no third- party insurance carrier to defend the claim as there is when the airport is "an additional insured" on the airline's policy. There is particular cost and risk to the airport in cases where the airline contests the claim. See CRP-CD-81 (enclosed herein), Appendix to Chapter 1, Airline Agreements, for excerpts from the BWI and STL Airline Agreements for provisions regarding insurance coverage to be provided by airlines. 1.14 Assignments and Subletting Airline agreements universally require the airline to obtain the consent of the airport spon- sor to any assignment of the lease or subletting, with most agreements making a specific excep- tion to the consent requirement for assignments to a parent or subsidiary or in the case of a merger. Most agreements state that the assignor or sublessor will remain liable for all rents and charges through the term of the agreement. A written assignment or sublease is generally required, and subleases are typically restricted to the sublessor's actual cost plus a 15% administrative fee.