American Public Transit AssociationRisk Management Seminar

June 10, 2013

Introduction James M. Bridgeman – Dept. Manager Risk & Insurance

Bay Area Rapid Transit District Defending the Case

Dale L. Allen, Jr. – Attorney at LawLow, Ball & Lynch

Changes at BART Mark Smith – Independent Police AuditorBay Area Rapid Transit District

Was It Covered? Richard Peers – Director, Business DevelopmentPrice, Forbes & Partners

Purpose: To Help You Prepare For a Crisis

The Key Word is Prepare Planning For the Unthinkable◦A Terrible Image Flashed Around the World◦An Employee Accused of Murder◦Death Threats◦General Manager Doused with Red Paint◦Universal Condemnation – “We’re Toxic!”◦Rioting in the Streets

Reflections on a Difficult Time◦Power of Social Media◦Murder Charge Against Officer◦ Lack of Police Oversight Process◦ Lack of Communication with the Public

Officers Right to Remain Silent vs. BART’s Duty to Inform Public

Over a Week With No Information From BART

Oscar Grant Shooting – The Brokers Response◦CNN Coverage Picked Up by Most

Underwriters Before BART Could Formally Advise Them

◦Difficult to Piece Together Sequence of Events to Give Factual Unbiased Summary

◦Managing Underwriters Concern/Desire to Get Their Experts Involved

◦Relaying BART’s Strategy

◦Explaining Legal Process◦Understanding Political/Local Pressures◦Creating Open Communication◦Achieving a Favorable Renewal Despite a

$50 million Pending Demand

Oscar Grant Shooting – Coverage Issues Highlighted◦Criminal, Deliberate/Intentional Acts Often

Excluded◦Civil Rights Claims or Allegations of

Discrimination Typically Excluded◦Cyber Attack Not Covered◦False/Arrest/Detention Excluded in

Definition of Personal Injury◦Underwriters Watch Closely How BART

Spent Retention

Oscar Grant Shooting Lessons Learned◦Establish Reporting Plan for Major Events

Between Client/Broker/Underwriters◦Specialists Already Chosen◦Coverage Reviewed to Consider Better

Approach and Reasonableness of Exclusions◦Cover for Intentional Acts if Defending

Public◦Broad Definition of Legal Liability to Address

Civil Rights

◦Consider Cyber Liability and Cover If Suitable

◦Differentiate Between Employment and Passenger Related Discrimination

◦Not All of These Commercially Viable But At Least Consider

THINK!... How Such an Event Could Impact Your System and What Precautions You Have in Place

Settlements With Family $2,800,000

Defense Expense $1,200,000

Police Overtime $1,400,000

Officers Involved 0n Paid Leave

$1,000,000

Police Training $800,000

Police Audit $135,000

Cost to Fire Two Officers $350,000

New Police Equipment $100,000

Total $7,785,000

Tragic Event Lead to Many Changes◦Civilian Oversight of Police◦Review of Police Procedures & Training◦Plan For Communication With Insurers◦Need to Actively Communicate to Public