7. INSURANCE

The Company uses a combination of insurance and self-insurance programs to cover workers’ compensation, general liability, property damage, and other insurable risks. For the majority of these insurance programs, the Company retains the initial $1.0 million of exposure on a per-claim basis either through deductibles or self-insurance retentions. Beyond the retained exposures, the Company has varying primary policy limits between $1.0 million and $5.0 million per occurrence. As of January 31, 2013, to cover general liability losses above these limits, the Company maintained commercial insurance umbrella policies that provide $200.0 million of coverage. Workers’ compensation liability losses have unlimited coverage due to statutory regulations. Additionally, to cover property damage risks above its retention limits, the Company maintained policies that provide $75.0 million of coverage. The Company is also self-insured for certain employee medical and dental plans. The Company retains up to $0.4 million of exposure on a per claim basis under medical plans.

The adequacy of workers’ compensation, general liability, automotive, and property damage insurance claims reserves is based upon actuarial estimates of required reserves considering the most recently completed actuarial reports in 2012 and known events. Actuarial reports are expected to be completed for the Company’s significant programs using recent claims data and may result in adjustments to earnings during the third and fourth quarters of 2013.

The Company had insurance claims reserves totaling $353.5 million and $343.8 million at January 31, 2013 and October 31, 2012, respectively. The balance at January 31, 2013 and October 31, 2012 includes $7.1 million and $13.0 million in reserves, respectively, related to the Company’s medical and dental self-insured plans. The Company also had insurance recoverables totaling $64.5 million at January 31, 2013 and October 31, 2012.

The Company had the following standby letters of credit, surety bonds, and restricted insurance deposits outstanding at January 31, 2013 and October 31, 2012, to collateralize its self-insurance obligations.


(in thousands)	January 31, 2013		October 31, 2012
Standby Letters of Credit	$	103,992	$	104,968
Surety Bonds		42,463		34,933
Restricted Insurance Deposits		27,982		31,720

Total	$	174,437	$	171,621