Hertz 2009 Annual Report Download - page 55

ITEM 1A. RISK FACTORS (Continued)
We face risks related to liabilities and insurance.
Our businesses expose us to claims for personal injury, death and property damage resulting from the
use of the cars and equipment rented or sold by us, and for workers’ compensation claims and other
employment-related claims by our employees. Currently, we generally self-insure up to $10 million per
occurrence in the United States and Europe for vehicle and general liability exposures, and we also
maintain insurance with unaffiliated carriers in excess of such levels up to $200 million per occurrence for
the current policy year, or in the case of international operations outside of Europe, in such lower
amounts as we deem adequate given the risks. We cannot assure you that we will not be exposed to
uninsured liability at levels in excess of our historical levels resulting from multiple payouts or otherwise,
that liabilities in respect of existing or future claims will not exceed the level of our insurance, that we will
have sufficient capital available to pay any uninsured claims or that insurance with unaffiliated carriers
will continue to be available to us on economically reasonable terms or at all. See ‘‘Item 1—Business—
Risk Management’’ and ‘‘Item 3—Legal Proceedings’’ in this Annual Report.
We could face significant withdrawal liability if we withdraw from participation in one or more
multiemployer pension plans in which we participate.
We participate in various ‘‘multiemployer’’ pension plans administered by labor unions representing
some of our employees. We make periodic contributions to these plans to allow them to meet their
pension benefit obligations to their participants. In the event that we withdraw from participation in one of
these plans, then applicable law could require us to make an additional lump-sum contribution to the
plan, and we would have to reflect that as an expense in our consolidated statement of operations and as
a liability on our consolidated balance sheet. Our withdrawal liability for any multiemployer plan would
depend on the extent of the plan’s funding of vested benefits. In the ordinary course of our renegotiation
of collective bargaining agreements with labor unions that maintain these plans, we may decide to
discontinue participation in a plan, and in that event, we could face a withdrawal liability. Some
multiemployer plans, including one in which we participate, are reported to have significant underfunded
liabilities. Such underfunding could increase the size of our potential withdrawal liability.
Environmental laws and regulations and the costs of complying with them, or any liability or
obligation imposed under them, could adversely affect our financial position, results of operations
or cash flows.
We are subject to federal, state, local and foreign environmental laws and regulations in connection with
our operations, including, among other things, with respect to the ownership and operation of tanks for
the storage of petroleum products, such as gasoline, diesel fuel and motor and waste oils. We have
established a compliance program for our tanks that is intended to ensure that the tanks are properly
registered with the state or other jurisdiction in which the tanks are located and have been either
replaced or upgraded to meet applicable leak detection and spill, overfill and corrosion protection
requirements. However, we cannot assure you that these tank systems will at all times remain free from
undetected leaks or that the use of these tanks will not result in significant spills or leakage. If leakage or
a spill occurs, it is possible that the resulting costs of investigation and remediation, as well as any
resulting fines, could be significant.
We have made, and will continue to make, expenditures to comply with environmental laws and
regulations, including expenditures for the cleanup of contamination at or emanating from, currently and
formerly owned and leased properties, as well as contamination at other locations at which our wastes
have reportedly been identified. We cannot assure you that compliance with existing or future
environmental legislation and regulations will not require material expenditures by us or otherwise have
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