1. (a) Except as provided under (b) of this section, the department will not require a lessee, permittee, or concessionaire to provide insurance coverage as a condition of that person's lease, permit, or concession.

2. (b) The department will require a lessee, permittee, or concessionaire to provide insurance coverage as a condition of that person's lease, permit, or concession only upon a written determination by the commissioner, or the commissioner's designee, after consultation with the Department of Administration, division of risk management, that

   1. (1) the activity, construction, or operation of the lessee, permittee, or concessionaire under the lease, permit, or concession will expose the state to a liability risk greater than the risk typically posed by the activity, construction, or operation of lessees, permittees, or concessionaires that are not required to obtain insurance under this section; and
   2. (2) it is in the best interest of the state to require the lessee, permittee, or concessionaire to provide insurance coverage.

3. (c) If the department requires a lessee, permittee, or concessionaire to provide insurance coverage under (b) of this section, the department will include provisions in the lease, permit, or concession that require the lessee, permittee, or concessionaire to obtain, and keep in force insurance coverage protecting both the state and the lessee, permittee, or concessionaire, including

   1. (1) a requirement that the insurer name the state as an additional insured or, if an additional insured provision is inapplicable, include a waiver of subrogation endorsement in favor of the state;
   2. (2) a requirement that the insurer notify the department at least 30 days before any termination, cancellation, or material change in the insurance coverage;
   3. (3) a provision requiring the lessee, permittee, or concessionaire to submit to the department a copy of each required insurance policy, or a certification that each required coverage is in effect, together with evidence that the premiums for each coverage have been paid; and
   4. (4) a statement identifying any insurance coverage and the lowest acceptable coverage limits the department requires for the activity allowed in the lease, permit or concession based on the table set out in this paragraph; if the lease, permit or concession allows more than one activity that requires the same kind of coverage, the coverage limit must be the highest coverage limit applicable to an activity allowed by that lease, permit, or concession:

   Cargo and passenger air

   service Aircraft and

   Aviation Liability

   Lowest acceptable cover-

   age limit based on the de-

   sign seat capacity of the larg-

   est aircraft used:

   30,000 lbs. CMGTW or

   less;

   As required by

   AS 02.40.010(a); greater than 30,000 lbs.

   CMGTW and up to 99

   seats; $750,000 per seat com-

   bined single limit per oc-

   currence and aggregate

   per year;

   100 or more seats $1,000,000 per seat com-

   bined single limit per oc-

   currence and aggregate

   per year;

   Use of airport premises

   (including ground-han-

   dling) Commercial General

   Liability (with air-

   port liability endorsement if

   the use is aviation-related) $500,000 bodily injury

   and property damage

   combined single limit per

   occurrence and aggregate per year; $100,000 per per-

   son bodily injury sublimits;

   Operation of owned or

   leased vehicle(s) on air-

   port Automobile Liability $500,000 combined single

   limit per occurrence and

   aggregate per year; $100,000 per person

   bodily injury sublimits;

   Commercial fueling on

   and off premises Airport Liability (to-

   gether with pollution cov-

   erage or a waiver of any

   pollution exclusion) $1,000,000 bodily injury

   and property damage

   combined single limit per

   occurrence and aggregate

   per year; $100,000 per person bodily

   injury sublimits;

   Products and Com-

   pleted Operations Lia-

   bility $100,000 bodily injury

   combined single limit per

   occurrence; $300,000 bodily injury

   aggregate; $100,000 property

   damage combined

   single limit per

   occurrence;

   Manufacture or sale of

   aviation products on air-

   port or premises (other

   than fuel) Products and Com-

   pleted Operations Lia-

   bility $100,000 bodily injury

   combined single limit per

   occurrence; $300,000 bodily injury

   aggregate; $100,000 property

   damage combined sin-

   gle limit per occurrence;

   Distribution, sale, or

   serving of alcohol on

   airport Liquor Legal Liability $500,000 combined single

   limit per occurrence and

   aggregate per year;

   Employment of employ-

   ees doing work on the

   premises or on the

   airport

   Employer's Workers'

   Compensation Insur-

   ance

   Requirements under

   AS 23.30.

4. (d) Notwithstanding the standards set out in (c) of this section, the department may, after consultation with the Department of Administration, division of risk management, require the lessee, permittee, or concessionaire to provide insurance coverage and limits different from those listed in (c) of this section; the department may establish different limits only upon a written finding that

   1. (1) higher limits or coverage are necessary because

      1. (A) the activity, construction, or operation of the lessee, permittee, or concessionaire under the lease, permit, or concession will expose the state to a liability risk greater than the risk typically posed by the activity, construction, or operation of other lessees, permittees, or concessionaires required to provide insurance under this section; and
      2. (B) it is in the best interest of the state to require the lessee, permittee, or concessionaire to provide greater insurance coverage or higher coverage limits; or

   2. (2) lower limits or coverage are justified because

      1. (A) the activity, construction, or operation of the lessee, permittee, or concessionaire under the lease, permit, or concession will expose the state to a liability risk materially lower than the average risk posed by the activity, construction, or operation of other lessees, permittees, or concessionaires to which (c) of this section applies; and
      2. (B) it is in the best interest of the state to allow the lessee, permittee, or concessionaire to provide insurance with reduced coverage or limits.
5. (e) If a lessee, permittee, or concessionaire obtains insurance with higher limits or greater coverage than any required by the department under this section, nothing in this section or in the lease, permit, or concession may be interpreted to limit the benefit and protection of the state as additional insured to less than the full higher limits and greater coverages.
6. (f) Neither the existence nor the absence of a requirement for insurance coverage under this section, nor compliance or noncompliance with such a requirement, relieves the lessee, permittee, or concessionaire of any obligation under the lease, permit, or concession, including the obligation of the lessee, permittee, or concessionaire to indemnify the state.

7. (g) In this section, unless the context otherwise requires,

   1. (1) "aircraft and aviation liability" means insurance that protects the insured from loss due to claims arising from ownership, maintenance, or use of aircraft;
   2. (2) "airport liability" means insurance that protects the insured from loss due to claims arising from activity on land or a building of an airport, including activities on the leased premises of an airport tenant, including operation of mobile equipment;
   3. (3) "liquor legal liability" means insurance that protects the insured from loss due to claims arising from risks relating to the distribution, sale, or service of alcohol by or on behalf of the insured;
   4. (4) "products and completed operations liability" means insurance that protects the insured from loss due to claims arising from the sale of goods or products sold, manufactured, handled, or distributed by the insured, or service operations that have been completed by the insured.

(Eff. 3/22/2008, Register 185)

Authority: AS 02.15.020, AS 02.15.060, AS 02.15.090, AS 02.15.200