Hertz 2014 Annual Report Download - page 26

Table of Contents
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• legal liability to members of the public and employees from other causes (general liability/workers' compensation); and
• risk of property damage and/or business interruption and/or increased cost of operating as a consequence of property damage.
In addition, we offer optional liability insurance and other products providing insurance coverage, which create additional risk exposures for us. Our
risk of property damage is also increased when we waive the provisions in our rental contracts that hold a renter responsible for damage or loss
under an optional loss or damage waiver that we offer. We bear these and other risks, except to the extent the risks are transferred through
insurance or contractual arrangements.
In many cases we self-insure our risks or insure risks through wholly-owned insurance subsidiaries. We mitigate our exposure to large liability
losses by maintaining excess insurance coverage, subject to deductibles and caps, through unaffiliated carriers. For our international operations
outside of Europe, and for our long-term fleet leasing operations, we maintain some liability insurance coverage with unaffiliated carriers.
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In our U.S. operations, we are required by applicable financial responsibility laws to maintain insurance against legal liability for bodily injury
(including death) or property damage to third parties arising from the operation of our cars and on-road equipment, sometimes called “vehicle
liability,” in stipulated amounts. In most places, we satisfy those requirements by qualifying as a self-insurer, a process that typically involves
governmental filings and demonstration of financial responsibility, which sometimes requires the posting of a bond or other security. In the
remaining places, we obtain an insurance policy from an unaffiliated insurance carrier and indemnify the carrier for any amounts paid under the
policy. As a result of such arrangements, we bear economic responsibility for U.S. vehicle liability, except to the extent we successfully transfer
such liability to others through insurance or contractual arrangements.
For our car and equipment rental operations in Europe, we have established a wholly-owned insurance subsidiary, Probus Insurance Company
Europe Limited, or “Probus,” a direct writer of insurance domiciled in Ireland. In European countries with company-operated locations, we have
purchased from Probus the vehicle liability insurance required by law, and Probus reinsured the risks under such insurance with Hertz International
RE, a reinsurer organized in Ireland, or “HIRE,” and / or HIRE Bermuda Limited, a wholly-owned reinsurance company domiciled in Bermuda. This
coverage is purchased from unaffiliated carriers for Spain. We also insure a portion of our European property risk through Probus. Thus, as with
our U.S. operations, we bear economic responsibility for vehicle liability in our European car and equipment rental operations, except to the extent
that we transfer such liability to others through insurance or contractual arrangements. For our international operations outside of Europe, we
maintain some form of vehicle liability insurance coverage with unaffiliated carriers. The nature of such coverage, and our economic responsibility
for covered losses, varies considerably. In all cases, though, we believe the amounts and nature of the coverage we obtain is adequate in light of
the respective potential hazards.
In our U.S. and international operations, from time to time in the course of our business we become legally responsible to members of the public
for bodily injury (including death) or property damage arising from causes other than the operation of our cars and on-road equipment, sometimes
known as “general liability.” As with vehicle liability, we bear economic responsibility for general liability losses, except to the extent we transfer
such losses to others through insurance or contractual arrangements.
To mitigate these exposures, we maintain excess liability insurance coverage with unaffiliated insurance carriers.
In our U.S. car rental operations, we offer an optional liability insurance product, Liability Insurance Supplement, or “LIS,” that provides vehicle
liability insurance coverage substantially higher than state minimum levels to the renter and other authorized operators of a rented vehicle. LIS
coverage is primarily provided under excess liability insurance policies issued by an unaffiliated insurance carrier, the risks under which are
reinsured with a subsidiary of ours, HIRE Bermuda Limited.
In our U.S. car rental operations and our company-operated international car rental operations in many countries, we offer optional products
providing insurance coverage, or “PAI/PEC” coverage, to the renter and the renter's immediate family members traveling with the renter for
accidental death or accidental medical expenses arising during the rental
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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