1. Risk Management & Insurance Overview
February 2, 2005
Confidential

2. Risk Management EPS Cash Flow Balance Sheet Risk Hazard Financial
Operational
Strategic
Natural Disaster
Mechanical breakdown
Fortuitous event
Inaccurate Financial Reporting
Liquidity
Business interruption
Workers Comp. Claims
Employment Matters
Auto Liability Claims
Loss in Shareholder Value
Loss of Reputation
Perils Creating
Exposure
to Losses

3. Managing Exposure to Loss
Alternatives to managing exposure
Risk Avoidance (loss control, safety programs, etc.)
Assumption of Risk (deductibles, retentions, etc.)
Self Insure or self assume (Pre-funding a loss relating to a specific risk)
Risk Transfer
By contract
Insurance policies
Loss Reduction – Responding proactively to reduce loss amount
Different risks require different risk management approaches.

4. Assumption of Risk Exposure
Casualty – WC, Auto Liability - $ - MM per claim/incident
General Liability – $ - MM per claim/incident
Directors & Officers – $ - MM per claim
Business Interruption – various “per day” deductibles
Other Deductibles
Retention of risk lowers premiums.

5. Current Market Environment

6. Discussion Topics Impact of SOX 404 certifications on D&O program
Trend of directors making personal restitution in a D&O claim
Severability under D&O
Severability of the application
Warranty questions
Inclusion of public documents as part of application
Severability of the policy exclusions (i.e. fraud)
Terrorism
Separate Terrorism program – Onshore Program
TRIA (Terrorism Risk Insurance Act) – All coverages