1. American Public Transit Association Risk Management Seminar June 10, 2013

2.  Introduction James M. Bridgeman – Dept. Manager Risk & Insurance Bay Area Rapid Transit District  Defending the Case Dale L. Allen, Jr. – Attorney at Law Low, Ball & Lynch  Changes at BART Mark Smith – Independent Police Auditor Bay Area Rapid Transit District  Was It Covered? Richard Peers – Director, Business Development Price, Forbes & Partners

3.  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

4.  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

5.  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

6. ◦ Explaining Legal Process ◦ Understanding Political/Local Pressures ◦ Creating Open Communication ◦ Achieving a Favorable Renewal Despite a $50 million Pending Demand

7.  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

8.  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

9. ◦ 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

10. 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

11.  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