GRTC changes insurers for accident liability [Richmond Times-Dispatch, Va.]

July 20--GRTC Transit System turned to a private insurer today for liability coverage, ending a relationship with a public transit pool that the bus company helped create more than 20 years ago.

The GRTC Board of Directors voted unanimously to purchase liability insurance from Chartis, a subsidiary of American International Group, instead of the Virginia Transit Liability Pool.

The change will save GRTC an estimated $500,000 a year, primarily by reducing the company's out-of-pocket cost before insurance covers the cost of a traffic accident involving a bus or other vehicle. GRTC's deductible cost would drop from $350,000 to $325,000 an incident, compared to an increase to $750,000 proposed by the transit pool.

GRTC will pay about $1.5 million in annual premiums under the Chartis policy. The premium for the transit pool would have risen from $1.3 million to $1.6 million a year, under a proposal submitted last month.

The new policy will take effect on Aug. 1 for at least one year, and possibly two. The cost of insurance in the second year would depend on whether GRTC experiences another major traffic accident that could require a large insurance payout.

GRTC's liability insurance costs have risen sharply primarily because of two bus accidents -- one that resulted in an $8 million jury award and undisclosed settlement for a woman who was run over by a bus in a pedestrian crosswalk in downtown Richmond three years ago. The company also faces a $10 million wrongful death suit filed by family members of a Prince George County woman killed as she crossed a street in downtown Richmond last year.

In other action, GRTC Chief Executive Officer John M. Lewis Jr. briefed the board on the termination of 20 employees last week as part of cost-cutting measures to close a gap in the transit company's budget. The company laid off 10 full-time administrative staff on Thursday, along with three hourly and four part-time maintenance staff, and three part-time administrative staff.

Twelve full-time customer service staff moved to part-time status as part of the cost-cutting measures, aimed at saving about $1.1 million a year. No bus operators, mechanics or union-represented workers were affected by the layoffs.

"While it was a very difficult decide, it certainly puts us on a good footing moving forward," Lewis said.

GRTC plans to raise its fare for the first time in 18 years on Aug. 1, pending action Monday by Richmond City Council. Council already has approved the 25-cent fare increase, but mistakenly made the increase effective Sept. 19. The increase would raise about $125,000 a month, or $1.5 million a year.

-- Michael Martz

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