National Academies Press: OpenBook

Airport Insurance Requirements (2023)

Chapter: Front Matter

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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2023. Airport Insurance Requirements. Washington, DC: The National Academies Press. doi: 10.17226/26908.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2023. Airport Insurance Requirements. Washington, DC: The National Academies Press. doi: 10.17226/26908.
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2023 A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP RESEARCH REPORT 248 Research sponsored by the Federal Aviation Administration Subscriber Categories Aviation • Administration and Management • Policy Airport Insurance Requirements Catherine B. Wells a n d Olivia Raese Albert Risk Management Consultants Needham, MA

AIRPORT COOPERATIVE RESEARCH PROGRAM Airports are vital national resources. They serve a key role in transpor- tation of people and goods and in regional, national, and international commerce. They are where the nation’s aviation system connects with other modes of transportation and where federal responsibility for man- aging and regulating air traffic operations intersects with the role of state and local governments that own and operate most airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Cooperative Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions to meet demands placed on it. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutions in 2003, based on a study spon- sored by the Federal Aviation Administration (FAA). ACRP carries out applied research on problems that are shared by airport operating agen- cies and not being adequately addressed by existing federal research pro- grams. ACRP is modeled after the successful National Cooperative High- way Research Program (NCHRP) and Transit Cooperative Research Program (TCRP). ACRP undertakes research and other technical activi- ties in various airport subject areas, including design, construction, legal, maintenance, operations, safety, policy, planning, human resources, and administration. ACRP provides a forum where airport operators can cooperatively address common operational problems. ACRP was authorized in December 2003 as part of the Vision 100— Century of Aviation Reauthorization Act. The primary participants in the ACRP are (1) an independent governing board, the ACRP Oversight Committee (AOC), appointed by the Secretary of the U.S. Department of Transportation with representation from airport operating agencies, other stakeholders, and relevant industry organizations such as the Airports Council International-North America (ACI-NA), the American Associa- tion of Airport Executives (AAAE), the National Association of State Aviation Officials (NASAO), Airlines for America (A4A), and the Airport Consultants Council (ACC) as vital links to the airport community; (2) TRB as program manager and secretariat for the governing board; and (3) the FAA as program sponsor. In October 2005, the FAA executed a contract with the National Academy of Sciences formally initiating the program. ACRP benefits from the cooperation and participation of airport professionals, air carriers, shippers, state and local government officials, equipment and service suppliers, other airport users, and research organi- zations. Each of these participants has different interests and responsibili- ties, and each is an integral part of this cooperative research effort. Research problem statements for ACRP are solicited periodically but may be submitted to TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by identifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel appointed by TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport professionals, the intended users of the research products. The panels prepare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and selecting research agencies has been used by TRB in managing cooperative research programs since 1962. As in other TRB activities, ACRP project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the intended users of the research: airport operating agencies, service pro- viders, and academic institutions. ACRP produces a series of research reports for use by airport operators, local agencies, the FAA, and other interested parties; industry associations may arrange for workshops, training aids, field visits, webinars, and other activities to ensure that results are implemented by airport industry practitioners. ACRP RESEARCH REPORT 248 Project 01-44 ISSN 2572-3731 (Print) ISSN 2572-374X (Online) ISBN 978-0-309-68772-0 Library of Congress Control Number 2022952455 © 2023 by the National Academy of Sciences. National Academies of Sciences, Engineering, and Medicine and the graphical logo are trade- marks of the National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, APTA, FAA, FHWA, FTA, GHSA, or NHTSA endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transporta- tion Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board does not develop, issue, or publish standards or specifi- cations. The Transportation Research Board manages applied research projects which pro- vide the scientific foundation that may be used by Transportation Research Board sponsors, industry associations, or other organizations as the basis for revised practices, procedures, or specifications. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the Airport Cooperative Research Program do not endorse products or manufacturers. Trade or manufacturers’ names or logos appear herein solely because they are considered essential to the object of the report. Published research reports of the AIRPORT COOPERATIVE RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to https://www.mytrb.org/MyTRB/Store/default.aspx Printed in the United States of America

e National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. e National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. John L. Anderson is president. e National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. e three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. e National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.nationalacademies.org. e Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. e mission of the Transportation Research Board is to provide leadership in transportation improvements and innovation through trusted, timely, impartial, and evidence-based information exchange, research, and advice regarding all modes of transportation. e Board’s varied activities annually engage about 8,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. e program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.

C O O P E R A T I V E R E S E A R C H P R O G R A M S AUTHOR ACKNOWLEDGMENTS The research for and development of this guide were performed under ACRP Project 01-44 and authored by Catherine Wells, CPCU, ARM, CRIS, MBA, and Olivia Raese, ARM, CIC, CRM, CRIS, RIMS-CRMP, PMP of J. H. Albert International Insurance Advisors, Inc. dba Albert Risk Management Consultants. Additional contributors included • U.S.-based commercial insurance carriers; • U.S.-based commercial insurance brokers; • U.S.-based nonhub, small hub, medium hub, and large hub airports; • Ron Rakich, CPCU, ARM, Ron Rakich Consulting LLC; and • Dr. Paul M. Foster, Jr., Ed.D., FAASTeam Program Manager, FAA. CRP STAFF FOR ACRP RESEARCH REPORT 248 Christopher J. Hedges, Director, Cooperative Research Programs Waseem Dekelbab, Deputy Director, Cooperative Research Programs Marci A. Greenberger, Manager, Airport Cooperative Research Program Matthew J. Griffin, Senior Program Officer Brittany Summerlin-Azeez, Program Coordinator Natalie Barnes, Director of Publications Heather DiAngelis, Associate Director of Publications Janet M. McNaughton, Senior Editor ACRP PROJECT 01-44 PANEL Field of Administration Lorena de Rodriguez, SSi. Inc., Phoenix, AZ (Chair) Thomas W. Anderson, Metropolitan Airports Commission (retired), Edina, MN Jeffrey L. Bilyeu, Texas Gulf Coast Regional Airport, Angleton, TX Lynn Hampton, Lynn Hampton Associates, Louisville, KY Geoffrey Harrold, Metropolitan Airports Commission, Edina, MN Kathleen Brockman, FAA Liaison Ashley Sng, Airports Council International—North America Liaison

ACRP Research Report 248: Airport Insurance Requirements provides best practices for airports developing an insurance program, including requirements for contracts with third parties doing business at the airport. This guide was developed for airport risk management personnel and includes the findings from a nationwide survey of airport risk managers and interviews with airport risk managers, commercial aviation insurance brokers, and commercial aviation insurance underwriters specializing in airport insurance. An airport’s insurance program is just one component of an airport’s overall risk management program. An insurance program can be quite complex and can include and/ or address the type of coverage, limits, retention amounts, and legal and contractual issues, among other factors. Additionally, airports must address associated risks when third parties, such as hangar tenants and vendors, have a need for access to a part of the airport. There is limited guidance available to help airports develop an insurance program for the airport’s own activities, as well as insurance requirements for the many third-party actors whose activities bring with them a level of risk to the airport. Finally, airports must also be sure that they are in compliance with federal airport grant assurances. The project was managed by ERG, Inc., while the research was led by Albert Risk Management Consultants. The guide includes a Minimum Airport Insurance Requirements and Standards brochure and Insurance Coverage Templates. Tasks included a literature review, an industry survey of both airport risk managers as well as insurance industry representatives, and conducting phone interviews with a select group of survey respondents. F O R E W O R D By Matthew J. Griffin Staff Officer Transportation Research Board

Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at nap.nationalacademies.org) retains the color versions. 1 Chapter 1 Purpose of This Guide 1 1.1 What Is This Guide About? 1 1.2 Why Was This Guide Written? 3 1.3 How This Guide Was Researched 4 1.4 Who Is the Intended Audience for This Guide? 5 1.5 What This Guide Contains 5 1.6 What This Guide Does Not Contain 6 1.7 Disclaimer 7 Chapter 2 Risks Faced by Airports 7 2.1 Top Airport Risks 17 2.2 Other Risks Not Addressed Through Insurance or Contractual Risk Transfer 20 2.3 Risks by Airport Size 23 2.4 Risks by Airport Region 32 Chapter 3 Airport Risk Management Practices 32 3.1 General Risk Management Practices 35 3.2 Insurance Purchasing Practices 43 3.3 Contractual Risk Transfer Practices 47 Chapter 4 Third-Party/Vendor Insurance Requirements 48 4.1 Five Steps to Developing Insurance Requirements 58 4.2 Contract Templates 59 Acronyms 61 References 64 Appendix A Annotated List of Literature on Airport Insurance and Risk 75 Appendix B Minimum Airport Insurance Requirements and Standards 76 Appendix C Insurance Coverage Templates C O N T E N T S

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An airport’s insurance program is just one component of its overall risk management program. An insurance program can be quite complex, addressing types of coverage, limits, retention amounts, and legal and contractual issues, among other factors.

The TRB Airport Cooperative Research Program's ACRP Research Report 248: Airport Insurance Requirements provides best practices for airports developing an insurance program, including requirements for contracts with third parties doing business at the airport.

Supplemental to the report are a Brochure and Insurance Coverage Templates.

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