NOTE 10 RISK MANAGEMENT AND LITIGATION
NOTE 10 Risk Management and Litigation Accrued Workers’ Compensation Costs
The MDTA recorded its portion of the State of Maryland’s workers’ compensation costs. The workers’ compensation costs accrual represents the liability for incurred claims and claims expense for the MDTA’s employees, less the cumulative excess of premiums paid to the Chesapeake Employers’ Insurance Company and net investment income applicable to the MDTA’s coverage. Changes in the balance for the MDTA’s workers’ compensation liability for the year ended June 30, 2024, are as follows:
Workers' Compensation
For the Years Ended June 30
2024
2023
Unpaid Claims Incurred Claims and Changes in Estimates Claim Payments Total Unpaid Claims
$
17,272 2,834 (3,377) 16,729
$
18,785 1,649 (3,162) 17,272
$
$
Self-Insurance and Third-Party Insurance The MDTA is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The MDTA participates in the State of Maryland’s self-insurance program (the Program), which covers general liability, property and casualty, workers’ compensation, environmental liabilities and provides certain employee health benefits. The Program allocates its cost of providing claims servicing and claims payments by charging a premium to the MDTA based on a percentage of estimated current payroll or based on average loss experience. The MDTA maintains certain third-party policies for structural property and liability damages. Settlements did not exceed insurance coverage for damages. The MDTA’s premium payments for the years ended June 30, 2024, 2023 and 2022 were approximately $8,069, $5,926, and $4,748, respectively. Litigation The MDTA is a defendant in a number of claims and lawsuits resulting from capital and maintenance contracts and other operational matters. The MDTA plans to vigorously defend these claims. In the opinion of the MDTA’s management, the settlement of these claims will not have a material adverse effect on the accompanying financial statements. On March 26, 2024, the M/V DALI allided with the Francis Scott Key Bridge causing a catastrophic collapse. As a result of the allision, six construction workers lost their lives, and 2 persons were injured. To date, no claims have been asserted against the MDTA. See Note 12 for more information regarding the Francis Scott Key Bridge.
74 | Maryland Transportation Authority | Notes to the Financial Statements ($ in thousands)
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