R.I. Report: Transit Authority Paid $5.5 Million to Settle Claims

July 20, 2007

Rhode Island's public transit authority has paid out $5.5 million in the last seven fiscal years to settle injury claims, according to records provided by the agency.

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The Rhode Island Public Transit Authority two years ago dropped its liability coverage in a cost-cutting move. But the decision leaves the authority exposed to potential multimillion dollar losses that could total a portion of its entire budget.

RIPTA produced records of 13 settlements for more than $50,000 since 1999, according to The Providence Journal. The costs of all settlements since that year totaled $5.5 million, not including insurance premiums, lawyers' fees and other expenses.

The biggest liability settlement, for just over $1 million, came in 2003 _ seven years after a man's legs were smashed by a RIPTA bus as he tried to enter his car. One woman settled for $700,000 after she said her back and rib cage were crushed by closing bus doors in 2000.

The agency's liability coverage covered losses above $1 million and up to $5 million. But the board of directors decided to eliminate the coverage in 2005 amid a series of budget deficits, a move that saved $500,000 per year in premiums.

Consultants who have reviewed RIPTA's finances recommended that the authority purchase insurance again, saying that even a simple accident could cost millions. They also found that RIPTA's casualty and insurance costs--$3.3 for fiscal year 2004--were much higher than other, similar transit agencies.

"I don't think we have excessive losses,'' said RIPTA Board Chairman Thomas Deller. "Given the number of people on the system, my impression is it doesn't seem excessive.''

Deller said the agency tries to settle claims rather than take them to trial and also looks to spread out payments over several years to soften the fiscal impact.