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The Risk Management Position within Each Organization Medium Large Airport Small Airport Interviewees Airport Interviewee Interviewee 1 2 3 4 5 6 7 8 Size of Risk Management 15 3 f/t 2 risk analysts. 2 Varies 5 5 4 f/t Staff 2 p/t 2 claims 2 brokers 4 safety APPENDIX E Staff Reports To HR Director Chief Admin. CFO Director of Finance. CFO Director of CFO CFO Officer. Admin. Member of Senior Staff? No Yes Yes Yes No Yes Yes Yes Interview Responses Insurance Purchasing RM authority to CFO can approve Board grants pur- RM sets terms for RM prepares RM responsi- RM handles all RM handles all Authority $50K. Over to $40K. Over 40K chasing authority coverage w/in paperwork and ble for RFP, purchases/ purchases/ $50K needs need board to Managing budget. works with selection, and decisions. decisions. board approval. approval. Director, who brokers. recommenda- grants to RM. tion to Board Finance approves for ratification. Decisions Concurrence of expenditures. Decisions by reviewed by CFO or higher if Purchasing plans board. board. warranted. reviewed annu- ally by board. Board approves pur- chases above spend- ing limits and new coverage. How has evolving role of Purchasing Risk mitigation Purchase based Consumer- driven. Other managers Mitigating risk Prefer to avoid Entity uses ERM. risk mgmt affected insur- decisions are more important on ERM. Use and purchase of handle uninsur- most impor- insurance. Commercial insur- ance purchasing in your made same way than insurance. No insurance performed able risks; reach tant. Insurance Attempt to ance evaluated to organization? each year. pressure to buy in conjunction w/ out to each is financial design self- transfer risk. insurance. Deci- Work with HR to other RM activities, Dept. mechanism to funded pro- sion makers prefer mesh safety and including those per- do so. All pro- grams. Buy stop RM evaluates risk retention to wellness issues. formed outside the grams have loss for cat Policy expiration exposure, prob- risk transfer. Internal audits to RM Dept. very large SIR. losses. dates uniform so ability of occur- advise on risk and that RM can focus rence, and insurance. on insurance pur- price. Buy stop-loss Evaluate cost of chasing once insurance for cat transfer vs. cost yearly. losses. Process becoming to retain in Price is not a more transparent. making ultimate factor if proba- decision. bility of expo- sure is high. Table continued on the next page 47

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48 Factors Influencing the Risk Management Function Medium Large Airport Small Airport Interviewees Airport Interviewee Interviewee 1 2 3 4 5 6 7 8 Has the recent soft market Flat premiums. Doubled limits. Obtained higher Keep limits/ Focus on more Keep limits flat and Keep limits/ Working w/ prompted any purchasing limits. deductibles flat and savings. take advantage of deductibles flat. FEMA to assess activities within your take advantage of price reductions. exposures. organization? No increased limits. Reduce premium. price reductions. Price reductions in Reduced deduct- Take advantage some lines. ibles at no extra Premiums reduced. of price Manage war and Asked broker to Increased sub-limits. Keep premiums/ charge. reductions. terrorism in-house. review policy at last limits flat, enhance renewal. Keep premiums/lim- coverage. Added TRIA. Keep deductible its flat, enhance Added TRIA. Focus on control- according to 10 years coverage. ling costs. Coverage enhance- of claims history. ment including 3-year rate lock. Purchased TRIA in Hold low reten- Have not added lines 1st round of price tions due to risk since 2001. reductions. appetite. Shopping PLL. Focus on negotiating enhanced terms on existing policies. Is your entity protected by Yes No Yes (Port) Yes Yes Yes Yes No TORT limits? Amount of Applicable $250K per claim N/A $100K per $200K /$300K N/A $50K for non- $500K per N/A TORT Cap (if any)? occurrence vehicular accidents person $500K per occurrence $500,600 per event $250K for vehicu- $1.5M per lar accidents occurrence Do TORT limits or lack Yes Government immu- Yes Yes, consider Uncertain Yes N/A thereof influence buying nity in place, which not buying decision? does affect purchas- insurance. ing decisions. Deny all claims.

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Addition or Deletion of Coverage or Product Lines Medium Large Airport Small Airport Interviewees Airport Interviewee Interviewee 1 2 3 4 5 6 7 8 Has your airport recently No No No No No No Enhanced No drop in cover- dropped or added cover- coverage. age, but changed age/product because of carriers. availability or affordability? If dropped/ added, which N/A N/A N/A N/A Considered not N/A Consolidated Carrier change on lines and why? buying insur- crime coverage. public official's ance and relying liability. on FEMA. War and Terrorism Is war and terrorism cov- Yes, limited cover- Yes Yes War yes, TRIA no. TRIA yes No Not currently, No erage purchased for liabil- age under airport lia- but considering. ity lines? bility policy. Is war and terrorism pur- Yes, provided under Yes Yes War yes, TRIA no. TRIA yes Terrorism is Yes, PEPP No chased for property lines? city's property policy included w/ gov- pool. that covers the ernment property airport. fund. What drives war and ter- Contractual require- Concern about Cost: currently TORT caps. rorism purchasing ments in leases. defense. inexpensive to Alternatives. decisions? Other options. buy TRIA. Would not buy at 2002 prices. How does your organiza- N/A Dip into reserves or FEMA Relied on tion plan to fund war and public funding. TORT caps in terrorism losses if not by the past. insurance? FAA has war risk program. Table continued on the next page 49

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50 Practice of Risk Management in Your Airport Organization Medium Large Airport Small Airport Interviewees Airport Interviewee Interviewee 1 2 3 4 5 6 7 8 How do you determine Consult with brokers, Benchmarking w/ RIMS RIMS ACI RIMS Benchmarking Internal audit. risk management best TPA, and industry ACI group. PRIMA PRIMA Peers PRIMA w/ ACI. Seek advice from practices? colleagues in RIMS Involvement in Comparison w/ city and county. and PRIMA. Publications and Other airport RMs. Safety and secu- ACI PRIMA. network. rity peers. other airports Use strict ERM Insurer for loss and government Collaboration with Contacts outside control. Broker for data. policy. airport mgmt peers entities. industry. CAPA Contact other air- and broker. Less reliance on ports for help w/ Involvement w/ gov- broker. ernance boards and special risks. mutual insurers. Experts, brokers, carriers. Risk Assessment Describe risk assessment Process for safety Surveys including RM collaborates w/ Individual depts. RM Investigate Informal process. All contracts go Conduct quantita- within your organization? and risk team. financial, facility, and team to assess risk on is in-house consultants losses. Ground floor eval- through RM. tive and qualitative Review claims airfield, consultant, new ventures. on risk transfer. Review uations on bigger Periodic inspec- assessments w/ trends. and professional Review business Consumer-driven. contracts. projects/ decisions. tions by staff owners. liability. lines activity at and by carrier. Document person- Work with carrier. Each dept. has safety Participate in Ongoing review. Incident reports. renewal. function and conversations Loss analysis. nel's understand- Contract review. ing of risk. Contract review. consultants. with underwrit- Cost assessment ers and others on approach. Monitor progress. risks. Benchmarking. How often does your Daily Quarterly When taking on new Address routine Frequent Frequent organization assess risk? ventures. operating risks at At renewal. renewal. Does your organization No Incident reports. RM has policy No use a template for review checklist. assessment?

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Mitigation of Risk Medium Large Airport Small Airport Interviewees Airport Interviewee Interviewee 1 2 3 4 5 6 7 8 Risk mitigation techniques Evaluate airport risks Work with internal Keep general Do not insure. Would like to Self-insured for Conduct thor- Choose not to used by your organization and safety protocol. audit department. reserves. SIR for catastrophe develop disaster WC. WC also ough analysis. insure or retain the Dedicated safety pro- Monitor exposures to Train other depart- (all lines). fund. self-administered. Rely on risk risk. fessionals employed. determine whether to ments on contractual Require tenants No Excess. transfer and Evaluate expo- Checklists. purchase insurance. risk transfer. to purchase Loss control. contract sures for possible Loss control. coverage. language. coverage. Safety committee. Claims control. Rely on state Negotiate new and federal insurance limits immunities. for parties con- Use non-insur- tracting w/ airport. ance products such as restricted claims fund. Risk Financing Methods Risk financing method CCIP Traditional OCIP Traditional approach OCIP Standard BR and Traditional pro- OCIP chosen for recent large w/ CM at Risk. contract Indemnity. gram with strict construction projects indemnity lan- guage, high limits, high safety stan- dards, and OCIP. Reason why this financing Evaluated as Low payroll associ- Quality of safety Comfort Savings. Traditional cho- Attractive method was chosen feasibility. ated with project not where there is public Familiarity Ability to extend sen because of program. Cost/benefit analysis sufficient to produce exposure. and restructure. time and staff- Solid safety mgmt. performed. savings. Maintain owner's ing constraints. Claim control. Better price, cov- perspective. erage, and safety. Loss Save money. simplification. Admin. Would your organization Yes Yes Yes Interested in OCIP. Yes use this risk financing technique again? 51

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Abbreviations used without definition in TRB Publications: AAAE American Association of Airport Executives AASHO American Association of State Highway Officials AASHTO American Association of State Highway and Transportation Officials ACINA Airports Council InternationalNorth America ACRP Airport Cooperative Research Program ADA Americans with Disabilities Act APTA American Public Transportation Association ASCE American Society of Civil Engineers ASME American Society of Mechanical Engineers ASTM American Society for Testing and Materials ATA Air Transport Association ATA American Trucking Associations CTAA Community Transportation Association of America CTBSSP Commercial Truck and Bus Safety Synthesis Program DHS Department of Homeland Security DOE Department of Energy EPA Environmental Protection Agency FAA Federal Aviation Administration FHWA Federal Highway Administration FMCSA Federal Motor Carrier Safety Administration FRA Federal Railroad Administration FTA Federal Transit Administration IEEE Institute of Electrical and Electronics Engineers ISTEA Intermodal Surface Transportation Efficiency Act of 1991 ITE Institute of Transportation Engineers NASA National Aeronautics and Space Administration NASAO National Association of State Aviation Officials NCFRP National Cooperative Freight Research Program NCHRP National Cooperative Highway Research Program NHTSA National Highway Traffic Safety Administration NTSB National Transportation Safety Board SAE Society of Automotive Engineers SAFETY-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (2005) TCRP Transit Cooperative Research Program TEA-21 Transportation Equity Act for the 21st Century (1998) TRB Transportation Research Board TSA Transportation Security Administration U.S.DOT United States Department of Transportation

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