PRESS RELEASE

Global Risk Managers, Inc. will act as consultant to AASHTO (American Association of State Highway and Transportation Officials) in providing Owner Controlled Insurance Program (OCIP) insurance and services to the 50 States, District of Columbia and Puerto Rico.

The nation's leader in statewide OCIP for transportation insurance and consultant for Federal Highway Administration provides customized solutions and services for AASHTO members around the Globe.

ATLANTA, GA: On November 14, 2002. Global Risk Managers, Inc., the leading provider of statewide transportation OCIP insurance and risk management for State establishments, joined forces with AASHTO in a statewide partnership. Global will provide OCIP insurance and services to the states represented by AASHTO.

Global already provides OCIP services for the State of Georgia and has served as consultant to the State of Florida and Louisiana.

AASHTO is a nonprofit, nonpartisan association representing highway and transportation departments in the 50 states, District of Columbia and Puerto Rico. It represents all five transportation modes: air, highways, public transportation, rail and water. Its primary goal is to foster the development, operation and maintenance of an integrated national transportation system, which is the association of the state DOT officials. AASHTO provides the OCIP specifications for the US DOT and all member states.

In the partnership, Global is poised to insure a market that will consist of over $100 billion of state construction projects a year. States may save 2% of construction cost or 30%-60% of insurance cost for projects included in the AASHTO OCIP. Global has written the OCIP specifications for AASHTO who will provide the same to the states and ultimately US DOT. Global has developed a specification that the states will use in order to get federal-aid funding. The American International Group (AIG) will underwrite the specifications developed by Global. The Federal Highway Administration (FHWA) will reimburse to the states 80% of the cost of the insurance program. Through AASHTO, Global will provide the states and FHWA with standardized OCIP coverage, terms and conditions.

This partnership is coming at a time when various transportation and environment spending stimulus packages are being proposed by the House and Senate. On October 5th the Democrats on the House Transportation and Infrastructure Committee introduced a proposal of $50 billion in transportation stimulus spending. Once these dollars are assigned, Global will be able to assist the states by minimizing their insurance risks.

This partnership also is being established at a time when the insurance market is hardening. Construction firms are being faced with higher premiums due to a slow market and insurers who are trying to regroup from the World Trade Center disaster. William McIntyre IV, chairman of American Contractors Insurance Group Ltd., Dallas, told 900 attendees at the annual insurance conference of the International Risk Management Institute in New Orleans (Oct. 29-Nov 1) that "insurance companies are being forced to introduce a new discipline to underwriting because of increasing operational losses, declining investment and the World Trade center costs." "Some companies are not affected [by the World Trade Center], but others are toast as we speak." McIntyre is estimating that premium hikes during contract renewals could be as high as 200%.

Michael Markman, CEO of Construction for Zurich North America in Edina, Minn. noted that construction defects are a major problem for insurers, caused by "more work spread over a thinning work force and inexperienced supervisory personnel." Contractors will have to do things better and differently if they want insurance. According to Markman, companies such as Zurich are looking for contractors who will "produce high quality work in a safe environment."

In light of these changes, the use of OCIP appears to be a sound resolution. Overall, the use of an OCIP can save money on large projects through lower bulk insurance rates, improved safety management processes, and reduced disputes between contractors over who was responsible for particular loss. The basic operational features of an OCIP are: (1) the owner purchases insurance coverage (all or some specific elements) to cover all contractors and subcontractors on a project; (2) there is an integrated owner-contractor managed safety program on the project; and (3) claims are proposed centrally. OCIP will significantly reduce the duplication and overlapping of insurance policies, which can result in litigation between insurance companies over claims.

The basic types of insurance for construction projects included workers' compensation, general liability, architects' and engineers' professional liability, builders' risk, excess liability and pollution liability. OCIP insurance can provide all of these types of coverage with the exception of automobile liability or insurance on the contractors' tools and equipment. In a report from the General Accounting Office (GAO) on advantages and disadvantages of OCIP (wrap-up) insurance for large construction projects (Letter Report, 06/01/99, GAO/RCED-99-155), insurance industry officials cited that wrap-up insurance can save project owners up to 50 percent on the cost of traditional insurance, or from 1 to 3 percent of a project's construction cost, depending on its size.

Global Risk Managers, Inc. is headquartered in Atlanta, Georgia and guided by an experienced team lead by Brad Anderson, Jr. AU.