Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies [Abstract]

Note 5 - Commitments and Contingencies

The Company maintains certain automobile and workers’ compensation insurance policies. Under these policies, the Company can either receive a return of premium paid or be assessed for additional premiums up to pre-established limits. Additionally, in certain instances the risk of insured loss is shared with a group of similarly situated entities. The Company recognizes estimated expenses and related liabilities for losses incurred but not reported to the Company or its insurance carrier. In addition, the Company maintains a self-insurance program for managing employee medical claims. A liability for expected claims incurred is established on a monthly basis and, as claims are paid, the liability is relieved. Third party stop-loss insurance coverage for annual individual medical claims exceeding $100,000 is obtained along with a $2 million aggregate umbrella policy for employee medical claims exceeding approximately $4.5 million per calendar year.

Estimated and recorded expenses and related liabilities for automobile and workers’ compensation losses as well as employee medical costs that have been incurred but not reported to the Company or its insurance carriers as of the financial report dates were as follows (in thousands):

	September 30,		December 31,
	2015		2014
Automobile and workers’ compensation	$	3,477	$	2,585

Employee medical coverage	$	1,170	$	1,057

AREC is named as a defendant in a number of Louisiana based suits involving alleged environmental contamination from prior drilling operations. Such suits typically allege improper disposal of oilfield wastes in earthen pits with one suit alleging subsidence contributing to the formation of a sink hole. AREC is currently included in three such suits. The suits are styled LePetit Chateau Deluxe v. Adams Resources Exploration Corporation dated March 2004, Gustave J. LaBarre, Jr., et. al. v. Adams Resources Exploration Corporation et. al. dated October 2012 and Henning Management, LLC v. Adams Resources Exploration Corporation dated November 2013. Each suit involves multiple industry defendants with substantially larger proportional interests in the properties except, all the larger defendants have settled their claims in the LePetit Chateau Deluxe matter. The plaintiffs in each of these matters are seeking unspecified compensatory and punitive damages. While management does not believe that a material adverse effect will result from the claims, significant attorney fees will be incurred to defend these matters. As of September 30, 2015 and December 31, 2014, the Company has accrued $500,000 of future legal/or settlement costs for these matters.

From time to time as incidental to its operations, the Company may become involved in various lawsuits and/or disputes. Primarily as an operator of an extensive trucking fleet, the Company is a party to motor vehicle accidents, worker compensation claims and other items of general liability as would be typical for the industry. Management of the Company is presently unaware of any claims against the Company that are either outside the scope of insurance coverage or that may exceed the level of insurance coverage and could potentially represent a material adverse effect on the Company’s financial position or results of operations.