SR-6-D (94)
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AD:HED:I.JS:mh Santa Monica, California
council Meeting: December 9, 1986 fo-])
DEt ~ 9 1986
TO: Mayor and City Council
FROM: City staff
SUBJECT: Recommendation to Adopt a Resolution Establishing
Minimum Requirements for Liability Insurance for
Commercial operators at santa Monica Airport
INTRODUCTION .
This report recommends that Council adopt a resolution
establishing standard requirements and minimum limits for
liability insurance coverage for all commercial operations at the
Airport. The staff recommendation has been reviewed by the
Airport working Group and was unanimously endorsed by the Airport
Commission.
BACKGROUND
The City Council on January 22, 1985 adopted amendments to
Chapter I of Article X of the Santa Monica Municipal Code
relating to Santa Monica Airport. The City Council held a public
hearing on these amendments on January 7, 1985. During the
hearing, the Council expressed a desire to set minimum insurance
liability requirements for the Airport and directed staff to
prepare appropriate recommendations.
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DEe - 9 1986
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section 10101 of the Santa Monica Municipal Code states:
"No person shall use the airport as a base for any commercial
activity without an operations permit issued by the city.
The term "commercial activity" includes the carrying for hire
of passengers, freight, express or mail, the sale of fuel and
related products or services, the sale or lease of new or
used aircraft, the sale of aircraft parts and supplies,
flight or ground schools requiring a fixed base, aircraft
repair and maintenance, the sale of food and refreshments, or
any other activity for which a business license from the city
is required."
Section IOIOl of the Code establishes standards and procedures
for commercial operations permits. Among these standards and
procedures is the requirement that the applicant must furnish
proof of such insurance as may be required by Resolution of the
city Council (SMMC section 10I02(4)).
Current Requirements
A search of Airport records indicates that standard liability
requirements for commercial operations at the Airport have not
been revised or reviewed since the early seventies. Although
liability requirements are a condition of all Airport lease
agreements, independent commercial operators and sublessees are
not bound by the same conditions applied to lessees of ground or
office space. ~
Conditioning the grant of a commercial operations permit on
compliance with insurance liability requirements is the least
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intrus i ve way for the Airport to ensure that all operators are
accountable for the services they provide. This condition also
will eliminate a competitive advantage that independent
commercial operators and sublessees now enjoy over Airport
lessees, which is inconsistent with provisions contained in the
Santa Monica Airport Agreement. Under the Agreement, the Airport
must be nondiscriminatory in its treatment of commercial
operators. The obligation also is stated in various grant
agreements between the city and the United states government
pursuant to the Air]1>ort and Airway Improvement Act of 1982,
section 502(a) (5).
Commercial operations at the Airport typically involve repair to
aircraft engines and other mechanical or electrical components,
storage of aircraft in hangars, fueling operations, flight
schools, aircraft sales and a range of related activities.
commercial operations also include a restaurant, a firm that
sells video tapes on aviation-related subjects, and other
activities and operations that have neither any relationship to
the air field nor a need for access to movement areas, such as
runway, ramps, and taxiways, and thus no direct aviation
exposure.
The insurance requirements proposed below are designed to account
for these differences as well as differences in scope and
magnitude of commercial operations and in exposure levels or
risk. The various categories of insurance requirements
distinguish operators who have aviation exposure from those that
do not have such exposure. The city should not impose greater
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insurance requirements on a restaurant merely because of its
Airport location.
Recommended coverages and minimum limits in the proposed
requirements are designed to reflect current risk and cost
factors including population density and commercial development
in the Santa Monica area. They also reflect the fact that air
traffic over the Los Angeles basin is greater than anywhere else
in the world. These risk factors give rise to greater
opportunities for loss. The proposed minimum limits reflect basic
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economic and demographic realities as well as air transportation
patterns. Prudent operators may want to secure coverage to the
full extent of their potential loss in the event they are found
negligent.
As a condition of the commercial operations permit procedure, the
minimum insurance requirements described in the attached
Resolution would not supersede any additional insurance which may
be required by the City in the course of lease negotiations with
full service Fixed Base Operators or tenants of city owned
hangars or office space. These requirements are not intended to
conflict with any existing leases or contracts at the Airport.
The Santa Monica Airport commission reviewed this proposal at its
meeting of November 24, 1986, following a review by the city
Attorney and the City's Risk Manager. The commission unanimously
endorsed the staff recommendation.
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BUDGET/FINANCIAL IMPACT
No budgetary or financial impact is anticipated as a result of
this action.
RECOMMENDATIONS
It is respectfully recommended that the Council adopt the
attached Resolution making compliance with the proposed insurance
requirements a condition of the Commercial Operations Permit at
Santa Monica Airport. .
Prepared by: Hank Dittmar, Airport Director
Linda SUllivan, Sr. Administrative Analyst
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CA:RMM:lamr024 Santa Monica, California
I City Council Keetinq II ~ ~
Resolution Number 7342(CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA PERTAINING TO MINIMUM
INSURANCE REQUIREMENTS FOR COMMERCIAL
OPERATORS AT THE SANTA MONICA AIRPORT
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WHEREAS, the City Council of the City of santa Monica
adopted Ordinance Number 1326 (CCS) on January 22, 1995;
WHEREAS, said Ordinance NIJ.mber 1326 (CCS) added sections
10101 and 10102 to Chapter 1 of Article X of the Santa Monica
Municipal Code;
WHEREAS, Santa Monica Municipal Code section 10101 requires
persons conductinq commercial activities at the Santa Monica
Airport to obtain an Operations Permit and section 10102 sets
forth standards and procedures applicable to such operations
Permits ("Permit");
WHEREAS, an applicant for a Santa Monica Airport Operations
Permit is required to furnish proof of such insurance as may be
set forth by city Council Resolution,
WHEREAS, the City Council desires to set minimum standard
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insurance requirements applicable to all applicants for santa
Monica Airport Operations permits;
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NOW, THEREFORE , THE CITY COUNCIL OF THE CITY OF SANTA
. MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. Authoritv. Pursuant to Sections 10101 and
10102 of the Santa Monica Municipal Code, this Resolution sets
forth insurance requirements for commercial operators at Santa
Monica Airport.
SECTION 2. Insurance Requirements for Full Service Fixed
Sase Operators. Prior to commencement of any occupancy,
operations or activities at the Santa Monica Airport pursuant to
a Full Service Fixed Based Operator Permit, Permittee shall, at
its sole cost and expense, and for the full term of this Permit
including any renewals thereof, obtain and maintain the following
minimum insurance amounts except as provided otherwise pursuant
to any written agreements executed by city which pertain to
occupancy, operations and activities located on Airport Premises.
(a) A comprehensive airport liability policy with a
minimum limit of not less than $5 million combined single limit
for bodily injury and property damage, covering at least all of
the following:
1. Premises Operations
2. Airport Operations
3. Premises Medical
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a. Minimum limit of $1,000/10,000
4. Completed Operations
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5. Products
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6. Personal Injury
7. Contractual Liability
8. Fire Legal Liability with a minimum limit of
$100,000.
9. Fueling, defueling or refueling operations with a
minimum limit of FIVE MILLION DOLLARS ($5,000,000) if
such operations are conducted by the Permittee, or
its officers, agents or employees.
(b) A business auto policy with a minimum I imi t of not
less than ONE MILLION DOLLARS ($1,000,000) combined single limit
for bOdily injury and property damage, providing at least all of
the following:
1. Coverages shall be applicable to any and all
leased, owned, hired, or non-owned vehicles used in
pursuit of any of the activities associated with this
Permit.
2. Any and all mobile equipment including cranes not
covered under the above Comprehensive Business Auto
policy shall have said coverage provided for under
the General Liability policy.
(c) An aircraft liability~ policy which shall provide
coverage for all aircraft owned, leased or operated by Permittee,
and which shall include but not necessarily be limited to the
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following coverage and minimum limits of liability for bodily
injury and property damage:
1. FIVE MILLION DOLLARS ($5,000,000) combined single
limit for bodily injury and property damges.
(d) Hangarkeepers' legal liability coverage with a
minimum of not less than ONE MILLION DOLLARS ($1,000,000) per
occurrence and FIVE Mrr,J,ION DOLLARS ($5,OOO,OOO) aggregate or
based on the value of the aircraft stored or to be stored inside
the hangar.
(e) Worker's Compensation policy written in compliance
with the laws of the state of California and providing coverage
for any and all employees of Permittee:
1. This policy shall also provide coverage for
$100,000 Employers' Liability.
SECTION 3. Insurance Requirements For Specialty and
Limited Fixed Base Operators and Other Commercial Ooerators With
~viation Exposure. Before commencement of any occupancy or
activities under a Permit For Specialty and Limited Fixed Base
Operators and Other Commercial Operators with Aviation Exposure,
Permittee shall, at its sole cost and expense, and for the full
term of this Permit including any renewals thereof, obtain and
maintain the following minimum insurance unless preexisting or
subsequent leases or contracts betw~en City and Permittee specify
otherwise.
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(a) A comprehensive airport liability policy with a
minimum limit of not less than THREE MILLION DOLLARS ($3,000,000)
combined si1llg1e limit for bodily injury and property damage,
covering at least all of the following:
1. Premises operations
2. Airport Operations
3. Premises Medical
a. Minimum limit of $1,000/10,000
4. Products/Completed Operations
5. Personal Injury
6. Fire Legal Liability with a minimum limit of
$100,000
7. Contractual Liability
(b) If required by the Airport Director, an Aircraft
liability policy which shall include but not necessarily be
limited to the following coverage and carry at least the
following minimum limits of liability for bodily injury and
property damage:
1. THREE MILLION DOLLARS ($3,000,000) combined
single limit for charter for bodily injury and
property damage. .
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(c) If required by the Airport Direcotr, a hangarkeeper's
liability policy with a minimum of not less than SEVEN HUNDRED
FIFTY THOUSAND DOLLARS ($750,000) per occurrence and ONE MILLION
DOLLARS ($1,000,000) aggregate, or based on the value of
aircraft stored or to be stored inside the hangar.
(d) A business auto policy with a minimum limit of not
less than ONE MILLION DOLLARS ($1,000,000) cOmbined single limit
for bodily injury and property damage, providing at least all of
the following:
1. Coverages shall be applicable to any and all
leased, owned, hired, or non-owned vehicles used in
pursuit of any of the activities associated with this
Permit.
2. Any and all mobile equipment including cranes not
covered under the above comprehensive business auto
policy shall have said coverage provided for under
the comprehensive general liability policy.
(e) A Worker's Compensation policy written in compliance
with the laws of the state of California and providing coverage
for any and all employees of Permittee:
1. This policy shall also provide coverage for
$100,000 Employers' Liability (Coverage B).
SECTION 4. Insurance Reauirements For Commercial Operators
Without Aviation Exposure. Before commencement of any occupancy,
operations or activities under a Permit For Commercial Operators
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without Aviation Exposure, Permittee shall, at its sole cost and
, expense, and for the full term of this Permit including any
renewals thereof, obtain and maintain the following minimum
insurance unless preexisting or subsequent leases or contracts
between the City and Permittee specify otherwise.
(a) A general liability policy with a minimum limit of
not less than ONE MILLION DOLLARS ($1,000,000) combined single
limit for bodily injury and property damage, covering at least
all of the following:
1. Premises Operations
2. Premises Medical
a. Minimum limit of $1,000/10,000
3. Products/Completed Operations
4. Personal Injury
5. Fire legal Liability with a minimum limit of
$IOO,OOO
6. Contractual Liability
(b) A business auto pol icy with a minimum limit of not
less than ONE MILLION DOLLARS ($1,000,000) combined single limit
for bodily injury and property damage, providing at least all of
the following: r
1. Coverages shall be applicable to any and all
leased, owned, hired, or non-owned vehicles used in
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.
pursuit of any of the activities associated with this
. Permit.
2. Any and all mobile equipment, including cranes
not covered under the above comprehensive business
auto policy shall have said coverage provided for
under the comprehensive general liability policy.
(c) A Worker's Compensation policy written in compliance
with the laws of the state of California and providing coverage
for any and all employees of Permittee:
1. This policy shall also provide coverage for
$100,000 Employers' Liability.
SECTION 5. All of the following endorsements are required
to be made a part of each pol icy of insurance required by this
Resolution:
(a) "The city of Santa Monica, its city Council, boards &
commissions, officers, employees, agents, and contractors are
hereby named as additional insureds."
(b) "This policy shall be considered primary insurance as
respects any other valid and collectible insurance the City of
Santa Monica may possess, including any self-insured retention
the City may have, and any other insurance the City does possess
shall be considered excess insurance only."
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(c) "This insurance shall act for each insured, and
additional insured as though a separate policy had been written
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for each. This, however, will not act to increase the limit of
liability of the insuring company.n
(d) "Thirty (30) days prior written notice shall be given
to the City of Santa Monica in the event of cancellation and/or
reduction in coverage of any nature. Such notice shall be sent
to:
"City of Santa Monica
3200 Airport Avenue
Santa Monica, California 90405
Attention: Airport Director"
This endorsement is the only endorsement required to be
made a part of Employers' Liability policy.
(e) The Insurance company issuing the policy or policies
shall have no recourse against the city of Santa Monica for
payment of any premiums or for assessments under any form of
policy.
(f) Any and all deductibles in the above shall be assumed
by and be for the account of, and at the sole risk of the
Permittee.
(g) "Subrogation Waiver - Permittee agrees that in the
event of a loss due to any of the perils for which it has agreed
to provide insurance, that Permittee shall look solely to its
insurance for recovery. Permittee hereby grants to City on
behalf of any insurer providing in~urance to either Permittee or
City, with respect to the activities of Permittee hereunder, a
waiver of any right of subrogation which any such insurer of
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Permittee may acquire against City by virtue of the payment of
, any loss under said insurance.
SECTION 6. copies of all required endorsements are to be
attached to the certificate of insurance which shall be provided
by the Permittee's insurance company as evidence of the
stipulated coverages. This proof of insurance shall be mailed
to:
City of santa Monica
3200 Airport Avenue
Santa Monica, California 90401
Attention: Airport Director
SECTION 7. The city Clerk shall certify to the adoption of
this Resolution, and thenceforth and thereafter the same shall be
in full force and effect.
APPROVED AS TO FORM:
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ROBERT M. MYERS
City Attorney
lamr024/hpw
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Adopted and approve cember, 1986.
I hereby certify that Resolution No. 7342 (CCS)
was duly adopted by the City Council of the city of Santa Monica
at a meeting thereof held on December 9, 1986 by the following
Council vote:
Ayes: Councilmembers: Finkel, A. Katz, H. Katz, Zane
and Mayor Conn
Noes: Councilmemhers: None
Abstain: Councilmembers: None
Absent: Councilmembers: Jennings and Reed
ATTEST:
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City Clerk