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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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