GRTC shopping for liability insurance [Richmond Times-Dispatch, Va.]
Jun. 16--GRTC Transit System is shopping for liability insurance because of a projected 75 percent increase in its annual premium fueled by two major accidents involving its buses.
CEO John M. Lewis Jr. said the cost of insuring GRTC buses and drivers is expected to increase from $1.2 million a year to $2.1 million if the company renews its current liability policy in August.
"It's almost a double of our insurance cost," Lewis told the GRTC board of directors yesterday in its monthly meeting at company headquarters in South Richmond.
GRTC is insured through the Virginia Transit Liability Pool, a self-insurance group that includes GRTC and eight other public transit companies.
The policy expires Aug. 1, so GRTC is working with the pool on an alternative policy, as well as soliciting proposals from private insurers. Pool officials had no comment yesterday.
Finding an affordable policy has become more difficult since a Richmond jury awarded $8 million this past fall to a state employee who was seriously injured by a GRTC bus while crossing North Eighth Street in September 2007.
GRTC subsequently appealed the award and recently settled the case for an undisclosed sum.
The company also faces a $10 million wrongful-death lawsuit filed by family members of Loucendia Reed Lambert, a Prince George County woman who was struck and killed by a GRTC bus Sept. 30 as she was crossing North 14th Street in downtown Richmond.
"It's been challenging, given the recent claims spike over the last few years," said Janice C. Graziosi, placement specialist at Willis HRH, an insurance brokerage that is helping GRTC shop for a new liability-insurance policy.
Part of the challenge will be to find ways to improve safety and reduce liability claims at GRTC, which was the subject of a two-day investigative series published last week by the Richmond Times-Dispatch.
Lewis told the board that The Times-Dispatch series had uncovered a number of flaws in how GRTC monitored driver records; shortcomings in Virginia's laws governing driver's licenses; and the practice of a number of judges in the Richmond area to dismiss traffic convictions involving commercial drivers who attend driver-improvement clinics.
The practice, known as "masking," is against state and federal law and represents "a major issue" for GRTC, Lewis said.
"Every time one of these convictions is wiped off the [driver's] record, it impedes us in our disciplinary process," he said. "I'm thankful this was brought out, and I think it will be addressed in a short time."
One private insurer, Chartis, made its pitch yesterday for a proposed policy that its representatives described as competitive with GRTC's other options.
Lewis declined to publicize the estimated cost of the Chartis proposal, which will be considered by the board, along with options presented by the transit liability pool, at its meeting next month.
He described a second private insurance proposal as "different" and did not elaborate.
Chartis representatives spent much of their presentation distancing the insurer from its parent company, American Insurance Group.
AIG received an $85 billion line of credit from the Federal Reserve Bank and $30 billion in Treasury funds two years ago to prevent the company from collapsing because of bad debt that it had insured in world financial markets.
The insurance arm changed its name to Chartis last year. It is headquartered in New York.
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Contact Michael Martz at (804) 649-6964 or [email protected].
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