Minimum Pipeline Insurance Requirement

1. Workers’ Compensation Insurance at statutory limits;

2. Employer’s liability, including bodily injury by accident and by disease, for $500,000 combined single limit per occurrence and a 12-month aggregate policy limit of $1,000,000;

3. Commercial general liability coverage, including blanket contractual liability, products and completed operations, personal injury, bodily injury, broad form property damage occurring in or about the license area, operations hazard, pollution, explosion, collapse and underground hazards for $5,000,000 per occurrence and a 12-month aggregate policy limit of $5,000,000; and

4. Automobile liability insurance (for automobiles used by Licensee in the course of its performance hereunder, including employer’s non-ownership and hired auto coverage) for $1,000,000 combined single limit per occurrence.

5. General. The PHA shall review the minimum insurance requirements above every five years during the term of the license to determine if an adjustment should be made. Any adjustment would compensate for the effects of inflation, with the objective to reestablish the value of coverage if required.

Each policy or endorsement, except those for worker's compensation and employer's liability, shall name the Port and its officers, employees and agents as additional insured parties, but limited to risks indemnified by licensee in the license. If the policy is written as "claims made" coverage and the Port is required to be carried as an additional insured, then the licensee shall purchase policy time extensions to provide coverage to the Port for a period of at least two years after the term of the license expires.

The licensee shall assume and bear any claims or losses to the extent of deductible amounts and waives any claim it may ever have for the same against the Port and its officers, agents or employees in respect of any covered event, but only to the extent of the liabilities assumed by the licensee.

All such policies and certificates shall contain an agreement that the insurer shall use its commercially reasonable efforts to notify the Port in writing not less than thirty (30) days before any material change, reduction in coverage or cancellation of any policy.

Each policy must contain an endorsement to the effect that the issuer waives any claim or right in the nature of subrogation to recover against the Port, its officers, agents or employees.

Each policy must contain an endorsement that such policy is primary insurance to any other insurance available to the Port as an additional insured, but only to the extent of the liabilities assumed by the licensee, with respect to claims arising under the policy.

The licensee shall be entitled to purchase and maintain the insurance required with so-called “blanket policies,” provided the coverage is at least at the levels described here and is otherwise adequate in keeping with prudent underwriting standards.

At the time of application, the licensee shall provide certificates of insurance assuring that the terms of this minimum insurance have been met. Licensee shall deliver to the Port certificates of renewal prior to the expiration date of each policy and copies of new certificates prior to terminating any such policies. The licensee, throughout the term of its license, shall maintain in force the required insurance coverage as described above.

The issuer of each policy shall have an A.M. Best Company financial rating of not less than A- (or a similar rating by a comparable service) and be licensed to do business in Texas, or be placed with Lloyds Underwriters or another financially sound insurance carrier agreeable to the licensee and Port.

In lieu of maintaining policies of insurance described here, the licensee may elect to self-insure against the risks described, provided that the licensee submits to the Port documents showing either (i) self-insurance reserves or other assets sufficient to pay judgments equal to the minimum limits of liability described here, or (ii) a net worth that exceeds ten times the aggregate minimum limits of liability as described above. If, during the term of the License, any such self-insurance program ceases or the self-insured's assets, reserves or net worth are no longer adequate to provide the above coverage, the licensee shall immediately notify the Port of such lapse of coverage and obtain commercial insurance in accordance with the requirements of this document within thirty (30) days. If the licensee self-insures, the licensee has a duty to defend the Port in the same manner as a licensee with insurance in any suit seeking damages against the Port in connection with the licensee's pipeline, and the licensee will pay all costs and expenses of such defense or reimburse the Port for all costs and expenses incurred by the Port for such defense, but only to the extent of the liabilities assumed by the licensee.

Port of Houston Authority
111 East Loop North • Houston, Texas 77029
P.O. Box 2562 • Houston, Texas 77252-2562
Phone: 713-670-2400

Copyright 2006 Port of Houston Authority • All Rights Reserved
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