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Insurance premium for seaports climb 70 percent
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Posted on Nov 26 2004
The Commonwealth Ports Authority has approved a supplemental budget of $333,000 to cover additional expenses, including a 70-percent increase in insurance premium for the seaports.
CPA comptroller George Palican said $312,000 of the funds will be used to pay the additional cost of insurance.
The remaining $17,000 will fund a new full-time position for the Tinian seaport. CPA will be hiring a new tariff technician.
The ports authority paid only $1.1 million in total insurance premiums in fiscal year 2004. For FY2005, CPA was billed over $1.4 million after the seaport insurance cost jumped to over $800,000 from only $480,000 last year.
Palican noted that CPA’s post-Typhoon Tingting and Chaba insurance claims have driven up the cost of insurance premiums. The ports authority has claims amounting about $9.4 million sitting with its insurance firm, the Lloyd’s of London, due to damage caused by the typhoons to the seaports.
No claims were filed for the airports because the Federal Aviation Administration was quick to provide CPA the funds for typhoon repair work, Palican said.
He noted that CPA can accommodate the $333,000 increase and still have enough funds to meet the bond coverage ratio required by the bondholders.
CPA’s comprehensive insurance policy also covers the directors and officers, CPA as an entity, commercial vehicles, excess automobile, crime insurance, and money and security.
