Cost to insure JWA to rise

Paul Clinton

JOHN WAYNE AIRPORT -- County officials are expecting to pay more to

insure the airport because of new limits on coverage resulting from the

Sept. 11 attacks.

The higher costs follow the airport’s loss of coverage for war and

acts of terrorism, which was canceled after the attacks, said Sharon

Lightholder, the county’s risk assessment manager.

All of the airport’s current insurance policies expire April 1, at

which time county officials are expected to face rising premiums.

“We anticipate the insurance pricing to be very unsteady in the near

term, with added stability coming back into the marketplace over time,”

Lightholder said. “In light of these factors, increases in premiums seem

likely and limitations in coverage seem as likely.”

The county holds a fistful of policies for John Wayne from more than

two dozen companies.

The airport’s most comprehensive policies are oriented toward

protecting property damage and loss. The county holds $250 million in

coverage with more than 25 companies, Lightholder said. There are 30

layers of that coverage.

The airport holds a “sub-limit policy” of $125 million in protection

against damage caused by an earthquake or flood.

The county pays $1.09 million a year for that coverage, Lightholder

said.

The county also holds $200 million in policies to protect against

lawsuits stemming from bodily or property damage to people using the

airport. That coverage costs $203,417 per year, Lightholder said.

How much higher those premiums could go isn’t clear at this point.

One premium the county won’t have to worry about are payments on its

war and terrorism coverage.

The county isn’t expected to renew that insurance, Lightholder said,

because it has skyrocketed since the terrorist attacks.

“This is not prudent coverage to purchase at this time,” Lightholder

said,” as the premiums are excessive and there are significant

limitations on coverage that make it not a good business decision.”

Without that protection, county taxpayers would shoulder the burden of

any payments made to victims of an attack.

Insurance costs aren’t the only ones heading higher at John Wayne. The

airport is expected to spend almost $13 million over the next year for

security-related costs, a $9-million increase.

As of Oct. 15, Airport Director Alan Murphy began using armed

sheriff’s deputies to search the trunks of cars entering the airport.

Before that, unarmed private guards were performing the task.

Sheriff’s deputies cost more than twice as much as private guards, but

Supervisor Todd Spitzer has said the peace of mind is worth it.

“If an unarmed security guard confronts a terrorist and gets hurt, we

would be put in a position of being liable,” Spitzer said Wednesday. “I

believe John Wayne Airport tried to cut corners.”

Spitzer also said the use of unarmed guards could jeopardize the

public’s safety.

Murphy also defended his decision, saying the airport has always been

focused on security for the traveling public.

“Security has always been a real high focus for us,” Murphy said.

“It’s always been priority No. 1.”

-- Paul Clinton covers the environment and John Wayne Airport. He may

be reached at (949) 764-4330 or by e-mail ato7

paul.clinton@latimes.comf7 .