Note 5 - Commitments and Contingencies

Under the Company’s automobile and workers’ compensation insurance 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 losses is shared with a group of similarly situated entities. The Company has appropriately recognized estimated expenses and liabilities related to these policies for losses incurred but not reported to the Company or its insurance carrier as follows (in thousands):

	March 31,		December 31,
	2017		2016
Estimated expenses and liabilities	$	2,504	$	2,657

The Company maintains a self-insurance program for managing employee medical claims. A liability for expected claims incurred but not reported is established on a monthly basis. As claims are paid, the liability is relieved. The Company also maintains third party insurance stop-loss coverage for aggregate medical claims exceeding $4.5 million. Medical accrual amounts are as follows (in thousands):

	March 31,		December 31,
	2017		2016
Accrued medical claims	$	1,923	$	1,411

Adams Resources Exploration Corporation (“AREC”) is named as a defendant in a number of Louisiana lawsuits involving alleged environmental contamination from prior drilling operations. Such suits typically allege improper disposal of oilfield wastes in earthen pits, with one matter involving allegations that drilling operations in 1986 contributed to the formation of a sinkhole in 2012 (the “Sinkhole Cases”). The Sinkhole Cases, while arising from a singular event, include a number of different lawsuits brought in Louisiana State Court and one consolidated action in the United States District Court for the Eastern District of Louisiana. In addition to the Sinkhole Cases, AREC is currently involved in two other such suits. These suits are styled LePetit Chateau Deluxe v. Adams Resources Exploration Corporation dated March 2004, and Henning Management, LLC v. Adams Resources Exploration Corporation dated November 2013. Each suit involves multiple industry defendants with substantially larger proportional interest in the properties. In addition, the Sinkhole Cases involve a number of defendants in the solution mining industry, in which AREC has never participated. In the LePetit Chateau Deluxe matter, all the larger defendants have settled the case. The plaintiffs in each of these matters are seeking unspecified compensatory and punitive damages. While management does not believe that a material adverse effect on the Company will result from the claims, significant attorney fees may be incurred by AREC to address claims related to these suits. As of March 31, 2017 and December 31, 2016, the Company has accrued $0.5 million 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.