Property and Casualty Claims Overview. Presented by. Larry Townsend, ARM, CPCU. Risk Manager, Port of Houston Authority

Transcription

1 Property and Casualty Claims Overview Presented by Larry Townsend, ARM, CPCU Risk Manager, Port of Houston Authority

2 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.

3 Port of Houston Authority Facilities

4 Turning Basin Terminal

5 Woodhouse Terminal

6 Care Terminal

7 Bulk Cargo Ship Offloading Steel at Turning Basin Terminal

8 Container Ship at Barbours Cut Terminal

9 Barbours Cut Terminal

10 New Transtainers for Barbours Cut Terminal

11 WORKERS COMPENSATION

12 Workers Compensation Description of Coverage Workers 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. Exclusions Injuries 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 Legislation Legislation was passed recently in Texas that is intended to provide better medical care for the worker, but reduce overall costs.

13 Workers Compensation Type of Program Funded 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.

14 Workers Compensation Number of Workers Compensation Claims Number of Claims Other Central Maint. BCT Total Conclusion: The total number of claims trended downward slightly since 2003 despite increased man hours worked and an increase in the number of employees. Time Period: 01/01/02 to 01/01/05

15 Workers Compensation Loss Time/No Loss Time Breakdown Loss Time Injuries Other BCT Central Maint. Total No Loss Time Injuries Other Central Maint. 68 BCT Total Conclusion: Loss Time injuries have trended upward from Time Period: 01/01/02 to 01/01/05

16 Workers Compensation Total Incurred Cost Workers Compensation Number of Claims Total Incurred Dollars $750,000 $650,000 $682, $550,000 $450,000 $483,213 $519, $350,000 $250,000 $334, $150, $50, Number of Claims -$50,000 Total Incurred Dollars Conclusion: Costs for workers compensation trended downward from 2002 to However, the costs once again increased in 2004 by approximately 55%, but still remains 24% below the high level of claims in Time Period: 01/01/01 to 01/01/05

17 Workers Compensation Claims Breakdown by Location ( 2002, 2003 and 2004) Percent to Total Claims 259 Claims Percent to Total Incurred Dollars - $1,535,404 BCT ILA 15% CENTRAL MAINT. 19% OTHER 19% CENTRAL MAINT. 17% OTHER 19% BCT MAINT. 47% BCT ILA 47% BCT MAINT. 17% Conclusion: The largest number of claims are generated by Barbours Cut Maintenance, but Barbours Cut ILA claims represent the largest cost.

18 WORKERS COMPENSATION LARGE CLAIM SUMMARY 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; $ 114,680 struck truck and parked car; sustained multiple injuries. Truck Driver Hand crushed when truck door slammed. $ 65,286 Lane Clerk Crane Operator Slipped on wet surface and injured knee after stepping out of booth. Slipped and fell on diesel fuel after stepping off steps of a crane. $ 126,351 $ 54,562

19 WORKERS COMPENSATION CLAIM SUMMARY Claimant Description of Accident Loss Maintenance Blacked out w hile driving truck; struck $ 26,608 truck and parked car; sustained m ultiple injuries Truck Driver Flipped Truck going around corner ; $ 37,864 sustained multiple injuries. Maintenance Stepped on hoist cable injuring knee. $ 26,599 Maintenance Maintenance Police Injured knee when stepping off forklift. Strained shoulder while attempting to remove drill bit. Injured shoulder w hile attempting to break fall w hen chair rolled aw ay w hile employee was attempting to sit down. $ 22,075 $ 25,359 $ 68,787

20 WORKERS COMPENSATION LARGE CLAIM SUMMARY 2004 Work Location Description of Accident Loss Maintenance Struck head on beam while exiting crane. $19,233 Maintenance Burned in the process of testing electrical $41,984 current on w harf crane. Maintenance Toe crushed under fork of forklift $20,568 Clerk Stepped in gap between truck scales and $52,156 platform injuring knee and ankle Maintenance Slipped on wet surface in bed of pickup $17,408 truck injuring knee. Maintenance Climbed into cab of crane and bent knee the $49,153 wrong way. Crane Operator Fell off ladder of crane injured both knees and ankles. $43,495

21 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.

22 Port of Houston Authority Injury Accidents By Type Workers Compensation Number of Claims Driving Eyes Fall/Step Lifting Equip. Repairs Slip/Trip Other 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

23 Workers Compensation Cost Analysis (2002, 2003 and 2004) Percent to Total Claims (259 Claims) Percent to Total Incurred Dollars - $1,535,404 All Other 40% Knee 12% Back 17% All Other 23% Knee 33% Shoulder 7% Eye 11% Hand 13% Shoulder 18% Eye 3% Hand 9% Back 14% 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.

24 Port of Houston Authority Medical Only/Lost Time Split (Combined 2002, 2003 and First 9 Months of 2004) Percent to Total Claims (259 Claims) Percent to Total Incurred Dollars - $1,535,404 Loss Time 33% Medical Only 7% Medical Only 67% Loss Time 93% Conclusion: As in prior years, the substantial portion of workers compensation cost relate to loss time claims. This is consistent with industry wide standards. Time Period: 01/01/02 to 01/01/05

25 Workers Compensation Number of Claims Number Of Claims Lost Time No Lost Time Total Conclusion: Number of claims are trending slightly downward. Time Period: 01/01/01 to 01/01/04

26 Workers Compensation Factors Affecting Management of Costs Medical costs Increased congestion at Barbours Cut Terminal until Bayport Container Facility is open for operation. Law of large numbers. Injuries caused by third parties.

27 Workers Compensation Action Plan Emphasize 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.

28 LIABILITY COVERAGE

29 Liability Coverage Description of Coverage General 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.

30 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.

31 Liability Issues Affecting Liability Claims Sovereign Immunity Tariffs Negligence Care, Custody and Control Per Package Limitation

32 Issues Affecting Liability Claims - Sovereign Immunity Under Section 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.

33 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.

34 Damage to Cargo Being Moved by Port of Houston Authority Transtainer

35 Damage to Cargo Being Moved by Port of Houston Authority Transtainer

36 Barbours Cut Terminal Liability Claim

37 Barbours Cut Terminal Liability Claim

38 Barbours Cut Terminal Liability Claim

39 Barbours Cut Liability Claim

40 Barbours Cut Terminal Liability Claim

41 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.

42 Barbours Cut Terminal Liability Claim

43 Barbours Cut Terminal Liability Claim

44 General Liability Claim

45 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.

46 Port of Houston Authority Liability Claims Number of Incidents Total Incurred Dollars General Liability Auto Liability Total Conclusion: The number of liability claims has trended down slightly despite increased cargo volumes. Time Period: 01/01/01 to 01/010/05

47 Port of Houston Authority Total Incurred Cost Liability Claims Number of Claims Total Incurred Dollars $325,000 $275,000 $225,000 $277,185 $313, $175, $125,000 $104,504 $89,370 5 $75,000 0 Number of Claims $25,000 -$25,000 Total Incurred Dollars Conclusion: The total incurred dollars for liability claims trended downward in 2003 and again in Time Period: 01/01/01 to 01/01/05

48 Property Insurance Coverage

49 Property Insurance Coverage Description of Coverage Provides 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. Deductibles Property - $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 - $1,000,000 Electronic Equipment - $5,000 per loss

50 Property Insurance Coverage Property Excluded Piers, 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.

51 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

52 Port of Houston Authority Damage Claim

53 Port of Houston Authority Damage Claim

54 Port of Houston Authority Damage Claim

55 ACTION ITEMS FOR DAMAGE CLAIM Place responsible party of notice of the claim immediately Retain 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.

56 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.