property and casualty claims overview presented by larry
TRANSCRIPT
Property and Casualty Claims Overview
Presented by
Larry Townsend, ARM, CPCU
Risk Manager, Port of Houston Authority
Property and Casualty Claims Overview
Discussion Points Examine the property and casualty insurance program in place for the Port of Houston Authority.Provide an analysis of workers’ compensation, liability and property claims occurring at the Port of Houston Authority.Discuss the methods used by the Port of Houston Authority to keep insurance cost down through an aggressive claims management program.
Port of Houston Authority Facilities
Turning Basin Terminal
Woodhouse Terminal
Care Terminal
Bulk Cargo Ship Offloading Steel at Turning Basin Terminal
Container Ship at Barbours Cut Terminal
Barbours Cut Terminal
New Transtainers for Barbours Cut Terminal
WORKERS’ COMPENSATION
Workers’ Compensation
Description of CoverageWorkers’ Compensation - Provides medical and indemnity benefits to employees injured “on the job”.Employers’ Liability – Provides coverage in situations where an injured third party claims workers’ compensation benefits.
ExclusionsInjuries caused by horseplay, intoxication or illness caused as a result of a natural or normal condition of life (i.e. heart attacks, arthritis, etc)Employees of governmental entities are not eligible for USL&H benefits under federal statutes.
New LegislationLegislation was passed recently in Texas that is intended to provide better medical care for the worker, but reduce overall costs.
Workers’ Compensation
Type of ProgramFunded Deductible Program: This a program resembles self insurance where the insurance company is paid a premium to cover profit and administration plus a deductible reimbursement fund representing anticipated losses. The deductible reimbursement fund is adjusted after 18 months and every 12 months thereafter until all losses under the program are settled.A $200,000 per claim deductible is applicable.
Time Period: 01/01/02 to 01/01/05
16 1217 17 15
5952
9284 83
15
56
0102030405060708090
100
2002 2003 2004
Other Central Maint.BCT Total
Number of Claims
Workers’ Compensation Number of Workers’ Compensation Claims
Conclusion: The total number of claims trended downward slightly since 2003 despite increased man hours worked and an increase in the number of employees.
12 109 106
47
38
68
58
49
9
33
0
10
20
30
40
50
60
70
2002 2003 2004
Other Central Maint.BCT TotalNo Loss Time Injuries
Time Period: 01/01/02 to 01/01/05
42
8 79
1214
2426
5
23
34
-113579
11131517192123252729313335
2002 2003 2004
Other Central Maint.BCT TotalLoss Time Injuries
Workers’ CompensationLoss Time/No Loss Time Breakdown
Conclusion: Loss Time injuries have trended upward from 2002.
Total Incurred Dollars
Conclusion: Costs for workers’ compensation trended downward from 2002 to 2003. However, the costs once again increased in 2004 by approximately 55%, but still remains 24% below the high level of claims in 2002.
Time Period: 01/01/01 to 01/01/05
Workers’ CompensationTotal Incurred Cost
Workers’ Compensation
Number of Claims
92
8483
88
78
80
82
84
86
88
90
92
94
Number of Claims
2001 20022003 2004
$483,213
$682,138
$334,048
$519,218
-$50,000
$50,000
$150,000
$250,000
$350,000
$450,000
$550,000
$650,000
$750,000
Total Incurred Dollars
2001 20022003 2004
BCT MAINT.47%
BCT ILA15%
CENTRAL MAINT.
19%OTHER
19%
Workers’ CompensationClaims Breakdown by Location
( 2002, 2003 and 2004)
Conclusion: The largest number of claims are generated by Barbours Cut Maintenance, but Barbours Cut ILA claims represent the largest cost.
Percent to Total Claims –259 Claims
Percent to Total Incurred Dollars - $1,535,404
BCT MAINT.17%
BCT ILA47%
OTHER19%
CENTRAL MAINT.
17%
WORKERS’ COMPENSATIONLARGE CLAIM SUMMARY -2002
Claimant Description of Accident Loss
Maintenance Stepped into hole, stumbled and injured knee while exiting pickup truck
$ 29,128
Truck Driver Blacked out while driving yard truck; struck truck and parked car; sustained multiple injuries.
$ 114,680
Truck Driver Hand crushed when truck door slammed. $ 65,286
Lane Clerk Slipped on wet surface and injured knee after stepping out of booth.
$ 126,351
Crane Operator Slipped and fell on diesel fuel after stepping off steps of a crane.
$ 54,562
WORKERS’ COMPENSATIONCLAIM SUMMARY - 2003
Claimant Description of Accident LossMaintenance Blacked out while driving truck; struck
truck and parked car; sustained multiple injuries
$ 26,608
Truck Driver Flipped Truck going around corner ; sustained multiple injuries.
$ 37,864
Maintenance Stepped on hoist cable injuring knee. $ 26,599
Maintenance Injured knee when stepping off forklift.
$ 22,075
Maintenance Strained shoulder while attempting to remove drill bit.
$ 25,359
Police Injured shoulder while attempting to break fall when chair rolled away while employee was attempting to sit down.
$ 68,787
WORKERS’ COMPENSATION LARGE CLAIM SUMMARY 2004
Work Location Description of Accident LossMaintenance Struck head on beam while exiting crane. $19,233Maintenance Burned in the process of testing electrical
current on wharf crane.$41,984
Maintenance Toe crushed under fork of forklift $20,568Clerk Stepped in gap between truck scales and
platform injuring knee and ankle$52,156
Maintenance Slipped on wet surface in bed of pickup truck injuring knee.
$17,408
Maintenance Climbed into cab of crane and bent knee the wrong way.
$49,153
Crane Operator Fell off ladder of crane injured both knees and ankles.
$43,495
Workers’ Compensation Claims -Accidents Defined
Driving – Accident occurred when worker was driving or operating motorized vehicle. (Includes forklifts, tractors, etc.)Eyes – Accident occurred as a result of worker getting debris in eyes.Fall/Step – Accident occurred as a result of a worker falling or stepping off an object.Lifting – Accident occurred while worker was performing a task involving lifting or raising.Maintenance Repairs – Accident occurred while worker was performing mechanical function, such as hammering, tightening, etc.Slip/Trip – Accident occurred as a result of a working slipping or tripping.Other – Any accident not falling into the above categories.
8
10
14
12 12
14
22
5
11
13
9
12
18
16
11
8
13
10
1213
17
0
5
10
15
20
25
Driving Eyes Fall/Step Lifting Equip.Repairs
Slip/Trip Other
2002 2003 2004
Port of Houston AuthorityInjury Accidents By Type
Workers’ Compensation
Number of Claims
Conclusion: Employees stepping off equipment and slip and falls are problem areas. Safety training will continue to focus on ways to prevent these types of accidents.
Time Period: 01/01/02 – 10/01/05
Knee12%
Back17%
Hand13%
Eye11%
Shoulder7%
All Other40%
Workers’ CompensationCost Analysis
(2002, 2003 and 2004)
Conclusion: On a combined basis for the thirty-six month period, knee, back, shoulder and hand are the parts of the body that were impacted the most cost wise.
Percent to Total Claims (259 Claims) Percent to Total Incurred Dollars - $1,535,404
Knee33%
Back14%
Hand9%
Eye3%
Shoulder18%
All Other23%
Loss Time33%
Medical Only67%
Port of Houston AuthorityMedical Only/Lost Time Split
(Combined 2002, 2003 and First 9 Months of 2004)
Time Period: 01/01/02 to 01/01/05
Conclusion: As in prior years, the substantial portion of workers’ compensation cost relate to loss time claims. This is consistent with industry wide standards.
Percent to Total Claims (259 Claims) Percent to Total Incurred Dollars - $1,535,404
Loss Time93%
Medical Only7%
Time Period: 01/01/01 to 01/01/04
34
67 68
52
8792
83
242026 49
84
0102030405060708090
100
2001 2002 2003 2004
Lost TimeNo Lost TimeTotal
Number Of Claims
Workers’ CompensationNumber of Claims
Conclusion: Number of claims are trending slightly downward.
Workers’ Compensation
Factors Affecting Management of CostsMedical costsIncreased congestion at Barbours Cut Terminal until Bayport Container Facility is open for operation.Law of large numbers.Injuries caused by third parties.
Workers’ Compensation
Action PlanEmphasize accident investigation.Establish positive interaction with injured worker.Back to work program.Report claims promptly in order for adjuster to intervene immediately to manage claim.Safety training to focus on problem areas.Periodic meeting with insurance company to discuss insurance reserves.Commitment by management and first line supervisors.
LIABILITY COVERAGE
Liability Coverage
Description of CoverageGeneral Liability – Provides coverage for claims filed against the Port Authority by third parties alleging bodily injury and property damage arising from Port Authority operations.Automobile Liability – Provides coverage for third party bodily injury and property damage claims filed against the Port of Houston Authority arising out of the ownership, operation or use of Port Authority vehicles.Umbrella Liability – Provides limits of liability insurance coverage excess of the limits of coverage included under the primary general and automobile liability insurance policies described above.
General and Automobile Liability Coverage Description of Coverage - Included under the same funded deductible program as described for the worker’s compensation insurance program.Deductible $200,000 per person bodily injury. $100,000 per accident property damage
Umbrella Liability Included as a coverage section under the Port Package Policy written through London Market.
Liability Issues Affecting Liability Claims
Sovereign ImmunityTariffs
NegligenceCare, Custody and ControlPer Package Limitation
Issues Affecting Liability Claims -Sovereign Immunity
Under Section 102-023 of the Civil Practices and Remedies Code, the Port Authority’s liability for third party claims is limited to $100,000 each person/$300,000 each accident bodily injury and $100,000 for property damages.
Issues Affecting Liability Claims -Per Package Limitation
Maximum liability for cargo is $1,000 per package unless prior to the commencement of the movement of the cargo, a higher value is declared and a premium, computed at one percent (1%) of the declared value of the cargo, is paid.
Damage to Cargo Being Moved by Port of Houston Authority Transtainer
Damage to Cargo Being Moved by Port of Houston Authority Transtainer
Barbours Cut Terminal Liability Claim
Barbours Cut Terminal Liability Claim
Barbours Cut Terminal Liability Claim
Barbours Cut Liability Claim
Barbours Cut Terminal Liability Claim
Issues Affecting Liability Claims –The Port Authority Must be Negligent
The Tariffs provide that except for damage or injury caused by the negligence of the Port Authority, for which the Port Authority shall not be relieved, users of its facilities agree to indemnify and save harmless the Port Authority from and against all losses, claims, demands, and suits for damages, including death and personal injury, and including court costs and attorneys fees, incident to or resulting from their operations on the property of the Port Authority.
Barbours Cut Terminal Liability Claim
Barbours Cut Terminal Liability Claim
General Liability Claim
Issues Affecting Liability Claims -Care, Custody and Control
Tariffs state that “The rates published in this tariff do not provide for, and the Port of Houston Authority does not accept care, custody and control of any cargo or other properties while on or in the wharfs, docks, transit sheds or other facilities managed and controlled by the Port Authority”.
Port of Houston AuthorityLiability Claims
Number of Incidents
13
8
21
14
12
26
19
3
22
14
5
19
02468
10121416182022242628
General Liability Auto Liability Total
2001 2002 2003 2004Total Incurred Dollars
Conclusion: The number of liability claims has trended down slightly despite increased cargo volumes.
Time Period: 01/01/01 to 01/010/05
Total Incurred Dollars
Conclusion: The total incurred dollars for liability claims trended downward in 2003 and again in 2004.
Time Period: 01/01/01 to 01/01/05
Port of Houston AuthorityTotal Incurred Cost
Liability Claims
Number of Claims
21
26
22
19
0
5
10
15
20
25
30
Number of Claims
2001 20022003 2004
$277,185
$313,756
$104,504$89,370
-$25,000
$25,000
$75,000
$125,000
$175,000
$225,000
$275,000
$325,000
Total Incurred Dollars
2001 20022003 2004
Property Insurance Coverage
Property Insurance Coverage
Description of CoverageProvides all risk property damage coverage on wharf cranes, yard cranes, transit sheds, warehouses and miscellaneous other properties owned by PHA; Total values are in excess of $130,000,000.Coverage extended to include loss of income should equipment or properties be shutdown as a result of direct damage from an insured peril. A $15,000,000 limit of coverage is maintained.Terrorism Coverage included.Special Policy is maintained on electronic equipment.
DeductiblesProperty - $250,000 per occurrence.Equipment – 10% of the value of the equipment insured subject to a minimum of $25,000 and a maximum of $100,000 each loss.Business Interruption - $1,000,000Electronic Equipment - $5,000 per loss
Property Insurance Coverage
Property ExcludedPiers, Docks and Wharves are not insured as these assets have a low probability of loss.Channel Blockage Coverage is not purchased because derrick barges and other heavy equipment is available in the Houston are available in the Houston area to remove sunken or stranded vessels or other debris in the ship channel or a temporary channel could be dredged around the wreck.Portable Equipment such as side loader, pencils and forklifts.Automobiles and Trucks.
Damage Claims
Damage to Container Handling Equipment Rented by a Stevedoring Company
User agrees under the tariff to return the equipment to the Port Authority in the same condition as when received, ordinary wear and tear excluded.Equipment is under User’s supervision, direction and control; User assumes sole responsibility and liability for injury to or death of any person or damage to or destruction of any property (including property of the Port Authority) arising out of , or connected with User’s possession, use or operation of such machinery.
Other Damage Claims
Port of Houston Authority Damage Claim
Port of Houston Authority Damage Claim
Port of Houston Authority Damage Claim
ACTION ITEMS FOR DAMAGE CLAIM
Place responsible party of notice of the claim immediatelyRetain marine surveyor if damage is substantial and damage involves dock, dolphins, pilings, etc.Keep responsible party advised during course of repair of damage.Recognize that you may have to adjust the claim for depreciation and betterment.
Basics to a Successful Claims Management Program
Be proactive on safety.Investigate all accidents.Report accidents promptly.Be involved in writing insurance and indemnity language in contracts.